Price Elasticity of Demand
Price elasticity of demand measures the change in quantity demanded of a good as the price of that good changes. The greater the price elasticity of demand, the more responsive …
Economics
Price Elasticity
Price elasticity of demand measures how much a change in price affects the quantity demanded of a good. It can be expressed as: pi = (ΔQ/ΔP) – 1 In other …
Law of Supply
The law of supply states that as the availability of a product increases, the price will decrease. This is because as more people are able to purchase the product, the …
Inverse Demand Function
Inverse demand functions are a tool used in marketing to understand how much of a good or service consumers are willing and able to pay for. The function takes into …
Economies of Scale
Economies of scale in marketing refer to the fact that as an organization grows, its costs of producing a good or service decrease, making it easier and cheaper to offer …
Contango
In finance, contango is a term used to describe when prices for goods and services are below their required prices because demand for the good or service is lower than …
Heath–jarrow–morton Model (hjm)
In economics, the Heath-Jarrow Model is a theoretical economic model that suggests that income inequality in developed countries is caused by differences in the productivity of employers and employees. The …
Brace–gatarek–musiela Model, Bgm
In economics, thebrace gatarek musiela Model is a financial model used to analyze financial markets and their effects on the economy. The model was developed by Polish economist Jan Brace …
Chen Model
The Chen Model of Finance is a model used in economics that suggests that financial capitalism can be successful if it is run efficiently and correctly. The model has been …
Vasicek Model
The Vasicek Model is an economic theory that suggests that interest rates can be controlled by limiting the supply of money. The theory was first developed by János Vasicek in …
Stochastic Differential Equations
In economics, Stochastic Differential Equations (SDEs) are a mathematical model used to describe the behavior of the stock market. They are important in finance because they can be used to …
Allocative Efficiency
The Allocative Efficiency of a resource is a measure of how much is used to produce the desired effect. It is important to note that the efficiency of a resource …
Production–possibility Frontier
In business, production possibility frontier (PPF) is a figure that reflects the maximum amount of future output that can be produced by a particular technology or business model. The PPF …
Generalized Expected Utility
The GEV is a metric used in economic analysis that measures the expected value of a particular behavior. The expected value of a particular behavior can be represented by two …
Expected Utility Hypothesis
In Economics, the Expected Utility Hypothesis (EUH) is a model of choice that predicts the behavior of individuals in markets. The EUH is based on the idea that people arerational, …
Complete Market & Incomplete Markets
Incomplete markets are markets in which there is a large but incomplete market for a good or service. Incomplete markets can be caused by various factors such as a lack …
Arbitrage-free Price
In economics, arbitrage-free price is a term used to describe a situation in which the market price of an asset is the same as the price at which it can …
Supply And Demand
The demand for goods is always in excess of the supply. This is true in both economic and natural systems. When a good or service is in high demand, companies …
General Equilibrium Theory
In general equilibrium theory, the state of a system is determined by the balances of its components. The system is in equilibrium when the pressure, income, and consumption pressures are …
Economic Equilibrium
In order for an economy to exist, there must be a set of tradeoffs between producers and consumers that allow for equilibrium. In economics, the equilibrium is typically a point …
Market Efficiency
In economics, market efficiency is a term used to describe the process of making efficient use of the market for the purchase and sale of goods and services. Market efficiency …
Equilibrium Price
An equilibrium price is the price at which all buyers and sellers are in equilibrium. It is the price that provides a reasonable balance between the needs of all parties …
Opportunity Cost
In economics, opportunity cost is a term used to describe the value that an individual or organization places on a specific option or activity. Opportunity cost is often measured in …
Market Price
In the market, prices for goods and services are determined by supply and demand. When there is more supply than demand, the price of a good or service falls, while …
Intrinsic Value
Intrinsic value is a term used in economics and finance to describe the benefits that a particular thing has for a particular person or group of people.
Value (economics)
In economics, the value of something is its ability to be exchanged for other things. In general, good things have a higher value than bad things.
Asset Pricing Theory
Asset Pricing Theory is a branch of Economics which deals with the analysis of financial markets in which investments are made. Asset pricing theory is used to understand how price …
Economic Value Added / Market Value Added
Economic value added, also known as market value added, is a measure of a company’s economic output. In order to calculate economic value added, economists typically divide the company’s total …
Dividend Puzzle
The dividend puzzle is a problem in economics that is used to analyze the effect of dividends on stock prices. The puzzle is named after the Danish mathematician Poul Einar …
Walter Model
Walter Model is an economist who has written on a variety of topics, including economic growth and the financial crisis. Model’s theory is that economic growth can be achieved through …
Tax Shield
In the context oftax law, a tax shield is an avoidance device used by individuals and businesses to reduce their taxable income. The term arose from the Tax Reform Act …
Market Timing Hypothesis
The market timing hypothesis is a theory that suggests that price determination in markets is determined by the current trend of the underlying asset. The hypothesis holds that investors are …
Financial Economics
Financial economics is the study of how financial markets function and how they can be used to allocate resources. Financial economists are also responsible for creating economic policies that influence …
Financial Theory
Financial theory is the branch of economics that studies the behavior of financial markets and their effects on economic decisions. Financial theorists use a variety of mathematical techniques to analyze …
Behavioral Economics
The field of behavioral economics is the study of how individuals and groups behave in response to incentives and constraints. This can be done through studying choices made by individuals, …
Experimental Economics
In economics, experimentation is the method used to determine what would happen if a particular economic agent were to perform a particular action. Experimental economics is a branch of economics …
Game Theory
The mathematical theory of game theory is the study of the behavior of games, including their theoretical and practical aspects. Game theory is used in many fields such as economics, …
Economic Growth Theory
Economic growth theory is a school of thought that holds that the economy grows more slowly in societies when there is more private production and less public consumption. \This theory …
Managerial Economics
In economic theory, managerial economics is the branch of economics that deals with the design, implementation and evaluation of management theories and techniques for businesses and organizations. There are a …
Mathematical Economics
Mathematical economics is the study of how economic systems can be modified to produce goods and services that are consistent with human welfare. Mathematical economics is divided into two main …
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