Month: August 2020

Consumer’s Equilibrium under Cardinal Utility Analysis

Meaning of Consumer’s Equilibrium Consumer’s equilibrium is the position in which the consumer reaches the highest level of satisfaction given his or her money income and the prices of goods. It means a consumer is said to be in equilibrium when he/she can maximize his/her utility with the given limited resources. At the consumer’s equilibrium …

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Cardinal Utility Analysis and its Assumptions

Concept of Cardinal Utility Analysis In this article, we will know the concept of cardinal utility analysis and its fundamental assumptions. The cardinal utility analysis or the marginal approach to utility states that utility or the satisfaction derived from the consumption of a commodity or service is measurable and can be expressed in quantitative terms. …

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Scientific Paradigm of Economics

Learning Objective To discuss the concept of the scientific paradigm of economics According to Wikipedia, the paradigm is a distinct set of concepts; thought patterns, including theories, research methods, postulates, and standards for what constitutes legitimate contributions to a field. Paradigm is a means of looking at something. In such a sense new paradigm means …

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Importance of Assumptions, Hypothesis, and Empiricism in Economics

The article will discuss the meaning and some key importance of assumptions, hypothesis, and empiricism in the study of economics. Meaning of Assumptions in Economics Economists apply assumptions to split down composite and complex economic phenomena and processes and advocate different theories to recognize and understand different economic variables.  Assumption can be defined as some …

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Hypothetico-deductive Method

Learning Objective To explain hypothetico-deductive method of scientific study Meaning of Hypothetico-deductive Method Hypothetico-deductive method also called H-D method is an approach to research or a method of construction of a scientific theory that will account for results procured through direct observation and experimentation and that will, through inference, forecast additional effects that can then be verified or disproved by empirical verification derived …

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Concept and Degree of Advertisement Elasticity of Demand

Concept of Advertisement Elasticity of Demand The advertisement expenditure has a direct effect on the demand for goods and services. In all modern businesses, advertisement plays a very important role. An increase in advertisement expenditure leads to an increase in the sale of a commodity. As advertisement has a saturation point, sales quantity increases up …

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