To understand what is irrationality it is better to understand what rationality is: rationality is the idea that our choices are made based on what brings us the most utility and benefit. Although, we may think we instinctively do this, we all have probably got thoughts in our head from when we have made a decision we regret and this is a source of irrationality which is what we are going to discuss. The main reasons for irrational thinking is:

  • Imperfect Information
  • Time-Pressure
  • Computational Weakness

Imperfect information is where the person isn’t fully aware of the decision’s outcome before they…

Surplus is defined as the extra benefit to society that a given good’s price gives to society. This can be split into producer and consumer surplus where producer surplus would be the extra profit they generate per good from a certain price level whilst consumer surplus is the utility provided by a product for its price level.

Consumer Surplus:

The demand curve shows the value a consumer finds a good at a given price level meaning that above equilibrium, there are consumers who value the product higher than its market price. …

The price mechanism is how we exchange goods and services in the modern world. Originally, we used the barter system which was a system of trade, however this relied on the people owning something of value for each other which couldn’t be guaranteed so money provided as that medium of exchange between the barter system creating the price mechanism. The price mechanism involves using the invisible hand of market forces to shift a product along the supply curve until it is at equilibrium. …

In Economics and in basic business, we need to understand how supply works so a firm can operate at optimal levels of production.

The supply curve is typically displayed as shown as it is usually used in accordance with the demand curve. What is suggests is that as the price of a good increases, the firm is likely to increase its supply of it and this is known as the law of supply. The reason the price increase will cause increases in supply is because the product is going to produce more profit since its margins are higher. …

There are a lot of measures in economics to measure changes in variable sin relation to change of another variable and these are called elasticities. These are the things that I am going to talk about today and what we can imply from these values.

Price Elasticity of Demand(PED):

PED shows the changes in demand of a product in relation to its price. For products with a very high elasticity, the products tends to be in perfect competition and so substitutes will increase in demand due to the substitution effect. For lower PEDs this suggests that the product is a addictive good, suggesting that…

Supply and Demand are the main components of a market and determine how the price of a product is determined.

The demand curve shows the inverse relationship between the price and the quantity bought based on that price. There are 2 main reasons for this inverse relationship:

  • Willingness To Pay: As the price of a good rises, its price may exceed its marginal utility in which case the consumer becomes unwilling to pay for the good. Furthermore, the consumer may switch to substitutes instead
  • Ability to Pay: As the price rises, the consumer may be unable to produce the real…

In economics there are 3 types of rational agent and I will be discussing the 3 of them in this article:


A consumer is anyone who purchases a good or service for the utility. Their objective is to maximise their utility within the restraints of their net income. Utility can be different for anyone where someone may perceive a holiday as an example of utility while another may consider it as food.


Producers are the firms manufacturing the goods and services. Their primary objective would be to maximise profits however they could be other things such as maximising revenue, gaining…

There are 3 fundamental types of economies- Free Market, Command Economy and a Mixed Economy. In this article I am going to explain each of them and discuss their advantages and disadvantages

Free Market:

A free market economy is an economy where resources are allocated based on the price mechanism aka money which is a medium of value. In simple terms, it means the public sector is solely responsible for the allocation for resources. Although solely free markets dont exist anymore, economies such as the Chinese Economy where 60% of its employment is in the public sector are examples of economies which…

  • Production Possibility Frontiers are an economic idea used for the allocation of resources are important because it showed the optimal allocation of resources for the best return.
  • This makes them useful because you could create a PPF for your own timetable to decide on how you should allocate time towards leisure compared to for example your time studying

Characteristics of a PPF:

  • Axes: The axes are going to be the 2 options you get and in the case of the example above, its the economies choice between producing 2 different final goods
  • All points on the line(called the frontier) are positions of maximum production…

Here the opportunity cost of Studying would be the time you could spend in leisure
  • Opportunity cost is an economic idea that some form of allocation of a resource means you are letting go of a different use of that resource. The benefit lost from the other alternative is known as its opportunity cost.

Although this is an idea spoken about in economics, I think it applies to a lot of our lives in a lot of ways and potentially could help someone improve their productivity. Consider your morning routine, what is the opportunity cost of you having a lie in over getting up early? Potentially the prospect of getting more work done while you…


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