What is Terms of Trade?

Terms of trade relates to international trade. It is a single number that represents the ratio of a particular country's exports and imports.

Chinese Economy - Thorough Lookup

The extraordinary emergence of China during the past three decades has been a hallmark  of the global economy,  heralding  a 21st century  world that  looks quite different from the previous  one.

Limitation of Barter System

Need for presence of double coincidence of wants: For barter to occur between two people, both would need to have what the other wants.

• Absence of common measure of value: In a monetary economy,

Consumer Surplus

Defining consumer surplus

Consumer surplus is a measure of the welfare that people gain from the consumption of goods and services, or a measure of the benefits they derive from the exchange of goods.

What determines price elasticity?

· The number of substitutes - the greater the substitutes, the more elastic the good - a small price rise means consumers switch to another brand.

Balance of trade

The balance of trade is the difference between the monetary value of exports

Merit Goods

Merit goods are goods that would be provided in a free market system, but would almost certainly be

Public Goods

Public goods are goods that would not be provided in a free market system, because firms would not be able to adequately charge for

Negative Externalities

An externality is a spill over from an economic activity. It is often referred to as a by-product of the market mechanism (supply equals demand).

Externalities: Source of market failure

Externalities are where the consumption or production of a good impacts on people other than the producers or consumers that

Market Failure

Market Failure 

Economists of different political philosophies argue about the extent to which governments need to intervene in the workings of the free market.

Visible, Invisible trade and balance of invisible trade

Visible Trade

Visible trade involves trading of goods which can be touched and weighed.

Balance of payments | short notes with it's components

Balance of Payments

It shows all the payments and receipts between one country and all the other countries it trades with.

Economic Integration

Economic integration refers to trade unification between different states by the partial or full abolishing of customs tariffs on trade taking place within the borders of each state.

Dumping

"Dumping" refer to any kind of predatory pricing.

Bilateral Trade

Bilateral trade or clearing trade is trade exclusively between two states, particularly, barter trade based on bilateral deals between governments, and without using hard currency for payment. Bilateral trade agreements often aim to keep trade deficits at minimum by keeping a clearing account where deficit would accumulate.

Noble lecture by Milton Friedman; His real words for Inflation and unemployment | Download in PDF

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Scarcity, Choice and Opportunity cost

Unlimited Wants

Human beings, in order to survive need a lot of things.

Income elasticity of demand

Income elasticity of demand measures the responsiveness of the demand for a good to a change in the income of the people demanding the good.

Price elasticity of demand

Definition
Price elasticity of demand (PED or Ed) is a measure used in economics to show the responsiveness, or elasticity, of the quantity demanded of a good or service to a change in its price. More precisely,