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Market incentives, such as reflected in prices of outputs and inputs, are theorized to attract factors of production, including labor, into activities according to comparative advantage, that is, for which they each have a low opportunity cost. The factor owners then use their increased income from such specialization to buy more-valued goods ...
The concentration of this economic activity in one area (usually a city center) allows for the growth and expansion of activity into other and surrounding areas because of the cost-minimizing location decisions of firms within these agglomeration economies to sustain high productivity and advantages, which therefore allow them to grow outside ...
Economist Arthur Pigou used the concept of externalities developed by Alfred Marshall to suggest that taxes and subsidies should be used to internalise costs that are not fully captured by existing market structures. [4] In his honour, these have been named Pigouvian taxes and subsidies. [5]
Some environmental economists have proposed that efficiency gains be coupled with conservation policies that keep the cost of use the same (or higher) to avoid the Jevons paradox. [8] Conservation policies that increase cost of use (such as cap and trade or green taxes) can be used to control the rebound effect. [9]
Governments use trade tariffs to artificially boost the price of imports to help domestic producers compete. Monopolies avoid the laws of supply and demand by removing competition.
In labor economics, an efficiency wage is a wage paid in excess of the market-clearing wage to increase the labor productivity of workers. [1] Specifically, it points to the incentive for managers to pay their employees more than the market-clearing wage to increase their productivity or to reduce the costs associated with employee turnover.
Tariffs projected to cost $2,600 per household. A tariff is a fee on imports, which proponents believe helps domestic manufacturers. Trump has proposed a 10% to 20% tariff on all $3 trillion per ...
According to the study, not only could the cost of food increase globally from 1.5% to 1.8% annually by 2035, but also, as climate change worsens, the numbers could increase up to 4%.