Friday, 12 July 2013 00:00

Cobweb Theory

Nicholas Kaldor was a Hungarian-born Economist who spent much of his working life at LSE and advising the British Government. He is credited with being one of the first to propose VAT. Amongst his other contributions was an explanation for wildly fluctuating and unstable prices in pork markets. This has since been broadened to include other markets and is known as Cobweb Theory.

Monday, 24 June 2013 13:19

Causes of Government Failure

Government failure happens when the government intervenes to correct for a particular market failure but for various reasons ends up making the situation worse. It is an important concept when it comes to evaluating the effectiveness of government intervention.

Sunday, 23 June 2013 21:25

Demand and Supply: Price Determination

Demand and supply are the foundation of AS micro and form part of unit 1 in the AQA specification. Demand is determined by the consumers' ability and willingness to pay for a good or service. Supply by producers' costs. Where these intersect determines the equilibrium or market clearing price.