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
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.
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.
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.
Economics is the study of how and why people, organizations, and governments create, gather, trade, and divide resources.
The study of economics has historically been divided into two primary areas of study — Macroeconomics and 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.
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.
Trade-Offs occur where choosing one option means sacrificing something in return. There is a cost to the choice.
Selfish and Social Interests produce the Incentives that motivate decision-making processes.