No Comments
/
Aug 10.09
/
Microeconomics
/ by Ro Econ
The shapes of indifference curves are smooth with unique tangent at any bundle we have well define marginal rate of substitution (MRS). MRS is undefined if m (slope) = kinked.
1. Strictly convex: Using the example of any 2 bundles on (A & B) the indifference curve and construct a line segment between them. With the exception of A&B every bundle on the line segment lies above the IC (therefore, more is preferred). See graph below (of diminishing MRS).
Continue reading this article »
No Comments
/
Aug 06.09
/
Microeconomics
/ by Ro Econ
Picking up from our last article (linked in the navigation below) on indifference curves and trade offs, here we introduce the marginal rate of substitution.
Marginal Rate of Substitution (MRS): The rate of substitution of good 2 (two) associated with a marginal reduction in quantity of good 1 at bundle B. Take a look at the graph for more insight.
Continue reading this article »
1 Comment
/
Aug 03.09
/
Energy
/ by Ro Econ
An interesting discussion regarding the price of oil and natural gas has picked up at Econbrowser. The data depicted in the graph below shows the prices were correlated up to last year. So what does that mean in the near future? A major correction?
The complete article is located here : http://www.econbrowser.com/archives/2009/07/natural_gas_and_1.html
[tags]oil, natural gas, gas, prices[/tags]
No Comments
/
Aug 03.09
/
Microeconomics
/ by Ro Econ
Before we talk about choices, preferences, trade offs and indifference curves, we should briefly look over some key terms. We assume people are rational decisions makers and that there is almost nothing someone is unwilling to trade for correct compensation.
Non-Satiation Assumption: If some is good, more is better. Consumers always prefer more of any good or service to less. Nonsatiated preferences are a common assumption in economic models of consumer behavior.
Maximization Assumption: Individuals always make choices that maximize their preference ordering.
The implications of these two terms are:
Continue reading this article »
1 Comment
/
Aug 01.09
/
Uncategorized
/ by Ro Econ
Good news to our readers, we're gearing up for the start of the new semester. Economics is a hot class to take especially given the recent world events surrounding our economy and money. As such, we're continually rolling out new microeconomics and macroeconomics notes, articles, and explanations for your review. So be sure to visit back often, add our feed to your readers, and search for your intro econ topic here at DiscussEconomics.
-Barry Econ
No Comments
/
Jul 27.09
/
Investments
/ by Ro Econ
The new investment instrument for Canadians is the tax free savings account or TFSA. Over time the contribution room will grow (loosely by 5000 + inflation per year). Depending on the type of agreement that you have for your TFSA, you can generally withdraw any amount from the TFSA at any time and for any reason, with no tax consequence.The withdrawals will also not affect your eligibility for federal income-tested benefits and credits.
BUT, you need to remember this crucial aspect when withdrawing:
Continue reading this article »
No Comments
/
Jul 23.09
/
Macroeconomics
/ by Ro Econ
From the Central Bank in Canada.
Inflation control and the economy
Inflation control is not an end in itself; it is the means whereby monetary policy contributes to solid economic performance.
• Low, stable, and predictable inflation allows the economy to function more effectively. This contributes to better economic growth over time and works to moderate cyclical fluctuations in output and employment.
Continue reading this article »
2 Comments
/
Jul 14.09
/
Insurance
/ by Ro Econ
If you are like the average person in America, you are paying around $817 per year in auto insurance, according to the Insurance Information Institute. As the country struggles through an economic recession, millions are either out of work, looking to save money, or both. The good news is that there are many ways to reduce car insurance premiums.
Keep these 10 tips in mind on ways you can find lower rates. Continue reading this article »
2 Comments
/
Jul 12.09
/
Debt Management
/ by Ro Econ
Back in 2007 CIBC stated what many thought was a safe prediction, Canadian house prices were likely to double in the next 20 years. The CIBC report compares population growth between two cycles of housing prices, from 1987 to 2006 and from 2007 to 2026, using Statistics Canada's medium-growth, medium-immigration projection as a benchmark.
Between 2007 and 2026, the projected 167,000 net decline in the number of first time buyers (Canadians between the ages of 25 and 44) is marginal. Since this age group is by far the largest contributor to overall housing demand, accounting for almost 68 per cent of all home sales, this relatively modest downturn will not significantly impact housing demand.
However, with the credit crunch, how far back have the numbers gone?
Continue reading this article »
No Comments
/
Jul 09.09
/
Personal Finances
/ by Ro Econ
Tell me this isn't true.
You know you're country is screwed beyond belief when you pour billions into a foreign country killing you're own citizens so your oil reserves stay padded. But why are Grandparents divorcing each other for the sole purpose of protecting assets?
The article above shows one sad situation where Grandma had to divorce Grandpa who has Alzheimer's. If she didn't go through the government and medicare would have sucked her dry kicking her to curb. Tell me this isn't how the entire USA operates....
