Mindblown: a blog about philosophy.
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Theory of Public Goods in Economics
Public goods theory purports to show why goods with the rigorously defined characteristics of publicness cannot be produced efficiently by the private sector of the economy, creating a market failure which implies a role for government in the production of those goods for which the market fails. Public good, in economics, a product or service that is…
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Optimal Taxation
Optimal taxation is the taxation that reflects society’s choices between the rival goals of equality and economic efficiency, the starting point of which is to maximize social welfare. The theory of optimal taxation has tended to recast the existing literature of public finance into the mould of classical welfare economics by emphasising minimisation of dead weight losses…
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Tax Incidnce
Tax incidence or incidence of tax is an economic term for understanding the division of a tax burden between stakeholders, such as buyers and sellers or producers and consumers. Tax incidence can also be related to the price elasticity of supply and demand. Tax incidence is the effect a particular tax has on the two parties of…
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Introduction to Public Economics
Public economics is the study of government policy through the lens of economic efficiency and equity. At its most basic level, public economics provides a framework for thinking about whether or not the government should participate in economics markets and to what extent its role should be. Public economics uses the tools of empirical analysis to…
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Incentives
In general, incentives are anything that persuade a person to alter their behaviour. It is emphasised that incentives matter by the basic law of economists and the laws of behaviour, which state that higher incentives amount to greater levels of effort and therefore, higher levels of performance. An example of incentive is extra money offered to those…
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Costs and Benefits
A cost-benefit analysis is the process of comparing the projected or estimated costs and benefits (or opportunities) associated with a project decision to determine whether it makes sense from a business perspective. Cost-benefit analyses help businesses weigh pros and cons in a data-driven way so they can make complex decisions in a systematic manner. For a…
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Cost Of Production
Cost of production is the total cost incurred by a business to either produce a product or offer their services. Production costs typically include supplies and raw materials that are consumed during production, along with labor expenses. Cost of production is a fundamental economic concept that applies to nearly any business model. Due to the high risk…
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Supply
Supply in economics is defined as the total amount of a given product or service a supplier offers to consumers at a given period and a given price level. It is usually determined by market movement. For instance, a higher demand may push a supplier to increase supply. In economics, supply is the number of goods an…
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Demand
Demand is the quantity of consumers who are willing and able to buy products at various prices during a given period of time. Demand for any commodity implies the consumers’ desire to acquire the good, the willingness and ability to pay for it. For example, if a consumer is hungry and buys a slice of pizza, the…
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Sovereignty
Sovereignty is a political concept that refers to dominant power or supreme authority. In modern democracies, sovereign power rests with the people and is exercised through representative bodies such as Congress or Parliament. Sovereignty is authority to govern a state or a state that is self governing. An example of sovereignty is the power of a king…
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