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In economics a trade-off is expressed in terms of the opportunity cost of a particular choice, which is the loss of the most preferred alternative given up. [2] A tradeoff, then, involves a sacrifice that must be made to obtain a certain product, service, or experience, rather than others that could be made or obtained using the same required resources.
The Williamson tradeoff model is a theoretical model in the economics of industrial organization which emphasizes the tradeoff associated with horizontal mergers between gains resulting from lower costs of production and the losses associated with higher prices due to greater degree of monopoly power.
Also called resource cost advantage. The ability of a party (whether an individual, firm, or country) to produce a greater quantity of a good, product, or service than competitors using the same amount of resources. absorption The total demand for all final marketed goods and services by all economic agents resident in an economy, regardless of the origin of the goods and services themselves ...
The earlier term for the discipline was "political economy", but since the late 19th century, it has commonly been called "economics". [22] The term is ultimately derived from Ancient Greek οἰκονομία (oikonomia) which is a term for the "way (nomos) to run a household (oikos)", or in other words the know-how of an οἰκονομικός (oikonomikos), or "household or homestead manager".
At worst, economists say, tariffs could lead to higher prices, supply shortages, weaker economic growth, a tit-for-tat trade war that threatens to remake the global economy and — if bad enough ...
Researchers in political economy have viewed the trade-off between military and consumer spending as a useful predictor of election success. [1] In this example, a nation has to choose between two options when spending its finite resources. It may buy either guns (invest in defense/military) or butter (invest in production of goods), or a ...
Financial economics is the branch of economics characterized by a "concentration on monetary activities", in which "money of one type or another is likely to appear on both sides of a trade". [1] Its concern is thus the interrelation of financial variables, such as share prices, interest rates and exchange rates, as opposed to those concerning ...
The book introduces 10 principles of economics "that supposedly represent the heart of economic wisdom". [10] [11] They are listed by Mankiw as follows: 1. People face trade-offs 2. The cost of something is what you give up to get it 3. Rational people think at the margin 4. People respond to incentives 5. Trade can make everyone better off 6.