Economics For Dummies, 2nd Edition, UK Edition

Product Information

The unemployment rate measures what fraction of the labour force cannot find jobs. The unemployment rate rises during recessions and falls during expansions.

Snagging a job as an economist is fiercely competitive—and highly lucrative. Having microeconomics under your belt as you work toward completing your degree will put you head and shoulders above the competition and set you on the course for career advancement once you land a job. So what are you waiting for? To help them to make sense of industries in which firms are interacting, economists group industries into three basic structures. These three structures are as follows: The gap between classes (assuming you mean socio-economic disparities) can be better understood through economic concepts. The emerging and evolving field of development economics focuses on disparities across countries on several parameters.Macroeconomics studies national economies, concentrating on economic growth and how to prevent and ameliorate recessions. Governments fight recessions and encourage growth using monetary policy and fiscal policy.

Sal is basically saying at the end of the video that it is good to have mathematical and rigorous thinking when making predictions, but also important to use common sense and logic or else the prediction will turn out wrong. Is that right? Microeconomics studies the maximizing behaviour of individual people and individual firms. Economists assume that people work toward maximizing their utility, or happiness, while firms act to maximize profits. Economics studies how people allocate resources among alternative uses. The reason people have to make choices is scarcity, the fact that we don’t have enough resources to satisfy all our wants. An industry consists of all firms making similar or identical products. An industry’s market structure depends on the number of firms in the industry and how they compete. Here are the four basic market structures:Oligopoly: An oligopoly is an industry with only a few firms. If they collude, they reduce output and drive up profits the way a monopoly does. However, because of strong incentives to cheat on collusive agreements, oligopoly firms often end up competing against each other. Perfect competition happens in an industry when numerous small firms compete against each other. Firms in a competitive industry produce the socially optimal output level at the minimum possible cost per unit.

Public goods: Private firms can’t make money producing certain goods or services because there’s no way to exclude nonpayers from receiving them. The government or philanthropists usually have to provide such goods or services. Externalities caused by incomplete or nonexistent property rights: Without full and complete property rights, markets are unable to take all the costs of production into account.

A recession occurs when the overall level of economic activity in an economy is decreasing, and an expansion occurs when the overall level is increasing. Peter Antonioni is a senior teaching fellow at the Department of Management Science and Innovation, University College, London, and coauthor of Economics For Dummies, 2nd UK Edition. Economics helps us understand individual behaviours (to an extent), and eventually understand national economies through macroeconomics. Unfortunately, there are many instances in which common sense has lost out to mathematical rigor in economics. An old joke is a quote from economist Kenneth Boulding that said something to the effect of "Mathematics brought rigor to economics. It also brought rigor mortis."