Question: What is Diseconomies of Scale in Economics?
Answer:
Diseconomies
of scale
occur when a business grows so large that the costs per unit increase. It
refers increase in long-term average cost of production as the scale of
operations increases beyond a certain level.
Diseconomies of scale occur for several reasons, but
all as a result of the difficulties of managing a larger workforce.
Question: What is Terms of Trade?
Answer:
It is a single number that represents the
ratio of a particular country's exports and imports. Specifically, terms of
trade represents the relationship between the price a country receives for its
exported goods and the price it pays for imported items.
Question: What is the Consumer Surplus in Economics?
Answer:
Consumer is the difference between the total amount
consumers would be willing to pay to consume the quantity of goods transacted
on the market and the amount they actually have to pay for those goods
Question: What is the difference between price and value?
Answer:
Price is
the quantity of payment or compensation given from one party to another in
return for goods or services. Price is set by the intersection of demand and
supply.
Value
is the innate worth of a commodity, which determines the normal ('equilibrium')
ratio at which two commodities exchange. This is the measure of worth that is
based purely on the utility derived from the consumption of a product or
service. Value drives demand. Price is what customers spend; value is what they
receive.
Question: What is paradox of value in Economics?
Answer:
The paradox of value (also known as the diamond-water paradox) is the apparent contradiction that,
although water is on the whole more useful, in terms of survival, than diamonds,
diamonds command a higher price in the market
Question: What is Paradox of Thrift in Economics?
Answer:
Economic concept that if
everyone tries to save an increasingly larger portion of his or her income,
they would become poorer instead of richer. This is because the economy will
slow down from reduction in demand and the very same people would lose their
jobs. This theory, however, applies mainly to Keynesian economics where
increased savings represent a diminishing circular flow of income.
Question: What is Absolute Advantage in Economics?
Answer:
A country has an absolute advantage if its output
per unit of input of all goods and services produced is higher than that of
another country.
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