While the benefits (and costs) of trade are numerous, economists tend to prioritize three key “gains” that the economy receives from domestic and global trade. Read more to learn about specialization, absolute advantage, and comparative advantage Continue reading Living Economics: The Three Main Benefits of Trade
The PPF is a model or graph demonstrating the trade-off involved in shifting production between two products where all resources are already in use. This article incorporates clear charts and examples to demonstrate how the PPF works. Continue reading Living Economics: Production Possibility Frontier (PPF)
The circular flow diagram is perhaps overly simplified and becomes increasingly complex as other parties and transactions form. The inclusion of foreign, governmental, and monetary institutions adds to the complexity of the system. Continue reading Living Economics: The Expanded Circular Flow Diagram
The Resource Management cycle is divided into four stages (Create, Gather, Trade, Divide), each with the possibility for disruptions to arise and each having its own issues and concerns. Continue reading Living Economics: The Resource Management System
Economics is the study of how and why people, organizations, and governments create, gather, trade, and divide resources. Continue reading Living Economics: Tools of the Trade
The study of economics has historically been divided into two primary areas of study — Macroeconomics and Microeconomics. Continue reading Living Economics: Macroeconomics v. Microeconomics
Explicit Costs are the cost of resources traded in external markets. Implicit Costs are the value of resources sacrificed by the owner for the sake of the company. Continue reading Living Economics: Implicit and Explicit Costs
The opportunity cost is defined as the second-best alternative use of the resource. A use that you sacrifice in using the resource in this way. Continue reading Living Economics: The Opportunity Cost
Trade-Offs occur where choosing one option means sacrificing something in return. There is a cost to the choice. Continue reading Living Economics: Incentive Driven Trade-Offs
Selfish and Social Interests produce the Incentives that motivate decision-making processes. Continue reading Living Economics: The Power of Incentives
