9 votes

What is the main reason behind the study of Neo-classical economics, instead of behavioural economics?

Behavioral economics is in large parts a collection of models and theories that purport to explain deviations from the predictions of neo-classical theory. For this reason, textbooks in behavioral ...
user avatar
  • 4,589
4 votes

Are corporations essential components of a free market economy?

A classic reference that is somewhat related is Ronald Coase's "The Nature of the Firm". Coase set out to address the following puzzle: since markets are efficient, why do we need to organize into ...
user avatar
  • 16.6k
3 votes

Why does the profit function in standard neoclassical theory have exactly one maximum?

Mathematically, most neoclassical models assume that the profits are concave. This guaranties the uniqueness of the maximum. In economic terms, the Neoclassical theory usually assumes that the law of ...
user avatar
  • 4,158
3 votes

By what means do prices change?

I like Justin's answer but I would point out that (fortunately) sellers don't even need to know about Supply, Demand, and Equilibria to react and adjust their prices as the theory suggests. Here is ...
user avatar
3 votes

By what means do prices change?

The simplest method would be to watch how quickly your inventory is depleted. If your baseline is that you sell 1000 widgets a day at a dollar per widget and suddenly you're selling 1250 widgets a ...
user avatar
3 votes
Accepted

How is inheritance classified in Adam Smiths profit/wage/rent classification?

Profit, wage and rent are rewards for inputs used in production, they constitute a decomposition of Income (or the Income-decomposition of output produced) Inheritance is a transfer, it does not ...
user avatar
3 votes

Do contemporary Marxist economists still deny the utility/value theory which underpins classical economics?

Conteporary Marxist economist Richard D Wolff says on the issue (abridged): The labor theory of value is not a theory is not a theory of prices. The prices of things is determined based on whats ...
user avatar
  • 7,715
2 votes

Do contemporary Marxist economists still deny the utility/value theory which underpins classical economics?

I am not familiar with contemporary Marxist economists, but the labour theory of value as formulated in Das Kapital does not deny that the usefulness (use value, in Marx' terms) of an item is ...
user avatar
  • 171
2 votes

In classical macroeconomics, why Labor supply responds to real wages and not money wages?

To begin with, economics is all about assumptions. Because of classical dichotomy, money level doesn't impact the growth of an economy in the long run. Money has no effect on GDP in classical ...
user avatar
2 votes
Accepted

Keynesian Ethics

If you enjoy ethical and philosophical aspects, you should look into international aid and intervention. Check out "Adaptive Preferences and Women's Empowerment" by Khader and work by Nussbaum in ...
user avatar
2 votes

What are exactly considered resources in modern economics?

What I think you want to consider to be grouped with land, labour and capital is another factor to be considered with labor- technology (A.K.A "Knowledge*). The term "technology" here means an ...
user avatar
  • 839
1 vote

What is the main reason behind the study of Neo-classical economics, instead of behavioural economics?

The main reason answers to the question "what is the difference between normative and positive economics?". Under the normative approach, we have a benchmark for what "should" ...
user avatar
1 vote

Classical Theory of Inflation - Money Supply, Money Demand and Prices

If the demand curve SHIFTS to the right (due to a thriving economy and an increase in transactional demand for money) and the central bank keeps the money supply the same, the result would be ...
user avatar
  • 43.5k
1 vote

Do Keyensians believe that it's wrong for households to aggresively save money?

The issue is more complex than your friend suggest and he is not completely right but at the same time there is a kernel of truth to what he is claiming. There are differences in the effect of savings ...
user avatar
  • 43.5k
1 vote

Short run Aggregate supply curve is horizontal or positively sloped?

Explaining the shape of the horizontal range In the very short run, the AS curve is perfectly price-elastic (i.e. on the diagram, it is a horizontal line). It is also referred to as the Keynesian ...
user avatar
1 vote

Difference between Negotiable Instrument and Financial Asset

CDs are money market instruments and hence are financial asset. There are traditional and negotiable CDs. Traditional CDs are like term deposits in banks, and are not tradable. Liquidation before ...
user avatar
  • 1,960

Only top scored, non community-wiki answers of a minimum length are eligible