Economic efficiency

Adam Smith, the father of microeconomic theories, puts faith in a virtually unregulated, free market that maximizes the dynamic efficiency. In his view, an ideal system of market should be based on free competition, increasing size of market, and considerable capital accumulation. He believes the production function is an increasing return to scale that would expand the market, lead to internal and external economies of scale, and ultimately, lower the cost of production. With the foundation of…

EC371 Term paper Contrast the ‘Adaptive Markets Hypothesis’ with the ‘Efficient Markets Hypothesis’, being careful to assess their respective strengths and weaknesses. 1. Introduction In recent years the effectiveness of the Efficient Market Hypothesis (EMH) has been substantially questioned by the financial economists and a new theory related to the market behaviour, known as the Adaptive Market Hypothesis (AMH), was proposed. In order to critically assess and contrast these…

Introduction In times of worldwide globalisation, customers receive more and more power on the market as they can choose more and more freely from where they like to buy their product or services. This leads to more balanced markets and a higher economic welfare as producers become price takers instead of price setters and can therefore barely ask exorbitant prices. Sometimes, however, several competing producers join into a cartel, in order to maximise their profits at the expense of the…

Globalization means the process whereby geographical distance becomes a less important factor in the establishment and development of cross-border economic, political and socio-cultural relations. Networks of relationships and dependencies acquire a growing potential to become international and world-wide. Initially globalization was seen as a widening, deepening and accelerating of the interconnection on a worldwide scale of all aspects of contemporary social life, from culture to criminality,…

the greater number of people. This is in line with what J.S Mills stated in Utilitarianism. Utilitarianism has to account for “long-term pleasure” and not merely acts that bring “immediate gratification”. The “long-term pleasure” here refers to the economic growth, and consequently a higher standard of living for the society. Hence, allowing automation to make decisions for human would be considered ethical, as it brings about a greater pleasure for the greater number of people and not just…

Adam Smith’s Theory of Economic Development According to Hunt (2002), Smith’s introduction of his theory revolves around the fact that the manner in which humans produce and redistribute the material necessities of life determines the personal and class relationship within society. While there are several concepts that explain the progression of this theory, our attention is directed mainly to three aspects: the four stages of economic development, the division of labor, and the establishment…

Subject: Jurisprudence. Other related subjects: Economics Keywords: Economics and law; Jurisprudence; Morals and law; Wealth distribution *UCL Juris. Rev. 241 ‘Economic analysis’ is an unfortunate term for a theory that explains how humans should, and on the whole do, make rational choices in a world of limited resources. Economics is concerned with material wealth, transactions of property, and is regarded as amoral. To many, economics and the economic approach to law are just the mechanics…

Tobin, one of the greatest economics advances in history happened in the United States along with an increasing growth of the public sector (151). Many people claim that the main problem with the government is that it is run poorly with bad management. There is a belief that if the government becomes more business-like, then it will become more efficient. Originally our government was designed to prevent excess concentrated power rather than focusing on promoting efficiency. In some ways,…

This case has provided its readers with a perfect example of environmental economics. Our lecture notes describe environmental economics as an approach that recognizes market failures regarding the environment and studies how we can take collective action to fix environmental problems in a cost effective manner. This economic utilitarian concept involves high amounts of government intervention in hopes to legally force polluters to sustainably manager their pollution levels. This is exactly what…

roughly 22% of the world’s nominal GDP in 2014 [1]. Its stability and efficiency is paramount to the economies of other countries. For example, as seen from the recent financial crisis of 2007-2009, a slowdown in the U.S. economy can have significant implications and detrimental spillovers to many of the world economies. Hence, to analyze other world economies successfully, it is imperative to have a firm understanding of their economic dependence with the U.S. economy. The U.S. economy is…