8/18/15

Games for learning economics

0 comments
Freeeconhelp.com is proud to present the following games to help you learn economics:


Economics island is a short "choose your own adventure" or "point and click adventure" type game that begins with you being stranded on an island. As you progress through time, you gather resources ultimately planning your escape. Along the way you learn about opportunity cost, PPFs, and other introductory vocabulary (typically good for the first 2 or 3 chapters in a standard text book). The game allows you to experience the economic principles firsthand, generally before you are introduced to the terminology. It is recommended as study guide, or perhaps for those who REALLY need to learn the material but are having a hard time with dry textbooks. There is also a bit of challenge to the game, in trying to leverage your economic knowledge into completing the game faster. The quicker you pick up the principles and use them, the higher the score you can attain. This game is available for play at Newgrounds.com at the above link, and available via google play: Economics Island App. Amazon users can download the game on Amazon at: Economics Island Amazon App.

Read More ->>

8/15/15

The effect of taxes on supply and demand

0 comments
One form of government intervention is the introduction of taxes. Taxes are typically introduced to increase government revenue, but they also have the effect of raising the cost of goods and services to the consumer. Because of the increased cost, we generally see a reduction in the quantity of goods and services produced and consumed after the introduction of taxes. A common form of tax is a sales tax, which is added on to the price of a product and paid by the consumer. Another common type of tax is a VAT (value added tax) which is paid by the producer along their production chain.

Read More ->>

Supply side externalities

0 comments
Externalities occur whenever a third party not directly involved in a transaction is affected by the transaction. These effects are external to market being studied, which is why they are called externalities. The most common example of a supply side --or firm-- externality is pollution. When a factory in California produces hot sauce for consumers in Florida, residents near the factory in California are affected by the dirty air or water even though they did not purchase the product. Because they were not involved in the transaction, their "cost" of dealing with the pollution may be ignored.

Read More ->>

Demand side externalities

0 comments
Externalities can be either positive or negative. They occur when a third party not directly involved in a transaction is affected by the transaction. For example, when someone decides to buy cigarettes and smoke them, they purchase the cigarettes from a firm (which incurs a cost and makes a profit) and then smokes them (enjoying the leisure associated with cigarette smoking). However, anyone near the smoker incurs the cost of having to breath/smell/see the smoke (which may be quite high if they are allergic). This cost to the third party occurs outside of the traditional supply and demand framework, which is why it is called an externality. Identification of the externality allows us to separate the private marginal benefit of an action vs. the social marginal benefit.

Read More ->>

6/19/15

Learning Economics Video Game

0 comments
Please try this new game and leave comments below!

Read More ->>

6/4/15

Price discriminating monopoly, solving for profit maximization

0 comments
This post goes over the math required to solve for the profit maximizing price and quantity of a price discriminating monopoly operating in two markets. Consider the following problem:


A cable company sells subscriptions in San Francisco and Boston. The demand function for each of the two groups, which are separate and do not have the ability to re-sell to members of the other community, are Psf = 480 - 4Qsf and Pb = 400 -2 Qb. The cost of providing the cable service for the firm is TC = 500 + 4Q, where Q = Qsf + Qb. If the company can price discriminate between the two markets, what are the profit maximizing prices and quantities for the San Francisco and Boston markets?

To solve this problem, we need to review the steps for finding the profit maximizing price and quantity for a monopoly. We find that we need to find the price and quantity where marginal revenue (MR) is equal to marginal cost (MC).

Read More ->>

Is a higher savings rate good or bad for long run growth?

0 comments


This post goes over a simple discussion (based on principles concepts) of the act of saving and its affect on an economy's long run growth. The short answer is that yes, higher savings rates are good for long run growth. However, there are a few caveats. If we begin with the simple assumption that:

Y = C + I + G

We find the first argument against saving because it lowers C (consumption) which reduces Y (Gross Domestic Product). We hear this argument on the news often, because of the assumption that our economy is driven by consumer spending. However, if we add another assumption:

I = S

This supposes that I (investment) in the economy is going to be equal to S (savings), so the reduction in consumer spending is going to be 100% offset by the increase in investment spending with no impact on GDP.

Read More ->>
 

I invite you to join dropbox!

I invite you to join dropbox!
Use the above link for an extra 250MB Free!
All content on this site is the copyright of webmaster. No re-posting is permitted. Powered by Blogger.
VigLink badge

Post Archive

| FreeEconHelp.com, Learning Economics... Solved! © 2009. All Rights Reserved | Template Style by My Blogger Tricks .com | Design by Brian Gardner Back To Top