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 […]
Scientific Paradigm of Economics Read More »
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
Importance of Assumptions, Hypothesis, and Empiricism in Economics Read More »
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
Hypothetico-deductive Method Read More »
The concept and theory of elasticity of demand play a vital role in the solution of economic problems and the determination of various economic policies. Mainly there are four types of elasticity of demand (price, income, cross, and advertisement). Here we will talk about the importance or uses of price elasticity of demand. The concept
Uses of Elasticity of Demand Read More »
Different degrees of price elasticity of supply describes the different nature of the product and their volume of supply as a reflection of the change in price. For example, the zero price elasticity of supply indicates that the volume of supply will not change with change in price. This means elasticity of supply is zero
Measurement of Price Elasticity of Supply Read More »
Meaning of Price Elasticity of Supply The Law of supply tells the direction in which the supply of a product will change as a result of the change in the price, but it does not give us the magnitude of change in supply. Price elasticity of supply gives us this information concerning the magnitude of
Concept and Degree of Price Elasticity of Supply Read More »
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
Concept and Degree of Advertisement Elasticity of Demand Read More »
Cross elasticity of demand measures the degree of responsiveness of the quantity demand for one good to the change in the price of any other related good, keeping other things the same. For the business firms, cross elasticity of demand is useful to see the competitors and determine their strategy accordingly. Goods and services can
Measurement of Cross Elasticity of Demand Read More »
Concept of Cross Elasticity of Demand The quantity demand of anyone commodity is affected by the change in not only its price but also by a change in the prices of related commodities. The effect changes in quantity demand of any one particular good due to the change in prices of other related goods is
Concept and Degree of Cross Elasticity of Demand Read More »
The degree of income elasticity of demand for different types of goods is different. So, it is imperative to quantity the income elasticity of demand for the business decision as well as other policy-related decisions. Economists have suggested different methods to compute the income elasticity of demand. The following are the major methods used in
Measurement of Income Elasticity of Demand Read More »