Economics Notes

➡️ Absolute poverty is a measure of poverty that is based on a fixed standard of living, such as a certain level of income or consumption. It is a measure of poverty that is independent of the economic context and is used to compare poverty levels across countries and over time.

➡️ Relative poverty is a measure of poverty that is based on the economic context. It is a measure of poverty that is relative to the average standard of living in a given country or region. It is used to compare poverty levels within a country or region over time.

➡️ Both absolute and relative poverty are important measures of poverty, as they provide different insights into the economic well-being of individuals and households. Absolute poverty is useful for comparing poverty levels across countries and over time, while relative poverty is useful for understanding the economic disparities within a country or region.

➡️ The poverty trap is a situation in which individuals or households are unable to escape poverty due to a lack of resources and opportunities. It is a cycle of poverty that is difficult to break out of due to the lack of resources and opportunities available to those in poverty.

➡️ The poverty trap is caused by a variety of factors, including low wages, lack of access to education and healthcare, and limited access to financial services. These factors can lead to a lack of economic mobility, as those in poverty are unable to access the resources and opportunities necessary to escape poverty.

➡️ To break the poverty trap, governments and other organizations must focus on providing access to resources and opportunities to those in poverty. This includes providing access to education, healthcare, and financial services, as well as creating job opportunities and providing social safety nets. Additionally, policies must be implemented to reduce inequality and ensure that those in poverty have access to the same resources and opportunities as those who are not in poverty.

➡️ Policies towards equity and equality can help to reduce economic inequality by providing access to resources and opportunities to those who are disadvantaged. This can include providing access to education, healthcare, and other social services.

➡️ Policies towards equity and equality can also help to create a more level playing field for businesses, allowing them to compete on a more equal footing. This can help to create a more competitive market, which can lead to increased economic growth.

➡️ Finally, policies towards equity and equality can help to create a more inclusive society, where everyone has the opportunity to reach their full potential. This can lead to increased productivity and economic growth, as well as improved social cohesion.

➡️ A negative income tax is a system of taxation where individuals with low incomes receive payments from the government instead of paying taxes.
➡️ This system is designed to reduce poverty and provide a basic level of income for those who are unable to work or have difficulty finding employment.
➡️ It is also seen as a way to reduce the burden of taxation on those with lower incomes, as they are not required to pay taxes on their income.

➡️ Universal benefits are benefits that are available to all citizens regardless of their income or financial situation. Examples include Social Security, Medicare, and unemployment insurance.
➡️ Means tested benefits are benefits that are only available to those who meet certain criteria, such as income level or disability status. Examples include Medicaid, Supplemental Nutrition Assistance Program (SNAP), and Temporary Assistance for Needy Families (TANF).
➡️ Both types of benefits are important for providing financial assistance to those in need, but the type of benefit that is most appropriate for a particular individual or family depends on their individual circumstances.

➡️ Increased consumer spending: A universal basic income would provide a guaranteed income to all citizens, allowing them to have more disposable income to spend on goods and services. This would lead to an increase in consumer spending, which would stimulate the economy.

➡️ Reduced poverty: A universal basic income would provide a guaranteed income to all citizens, regardless of their employment status. This would reduce poverty and inequality, as those who are unable to find employment would still have a basic income to live on.

➡️ Increased economic security: A universal basic income would provide a guaranteed income to all citizens, regardless of their employment status. This would provide economic security to those who are unable to find employment, as they would still have a basic income to live on. This would also reduce the risk of poverty and inequality, as those who are unable to find employment would still have a basic income to live on.

➡️ Labour market forces such as supply and demand, wages, and job availability can have a significant impact on the economy. Government intervention in the form of taxation, regulation, and subsidies can also affect the labour market.

➡️ Taxation can be used to redistribute income, encourage certain types of employment, and discourage others. Regulations can be used to protect workers from exploitation and ensure fair wages. Subsidies can be used to encourage certain types of employment and provide incentives for businesses to hire more workers.

➡️ Government intervention in the labour market can have both positive and negative effects. It can help to create jobs and increase wages, but it can also lead to inefficiencies and market distortions. It is important for governments to carefully consider the potential impacts of their policies before implementing them.

➡️ Demand for labour is a derived demand, meaning that it is derived from the demand for the goods and services that the labour produces. This means that the demand for labour is dependent on the demand for the goods and services that the labour produces.

➡️ The demand for labour is also affected by the cost of labour, which is determined by the wages and salaries that employers are willing to pay. If wages and salaries are too high, employers may be less likely to hire workers, resulting in a decrease in the demand for labour.

➡️ The demand for labour is also affected by the availability of labour. If there is an abundance of labour, employers may be more likely to hire workers, resulting in an increase in the demand for labour. Conversely, if there is a shortage of labour, employers may be less likely to hire workers, resulting in a decrease in the demand for labour.

➡️ Supply and Demand: The demand for labour is determined by the balance between the supply of labour and the demand for it. If the demand for a particular occupation or job is high, then the wages for that job will be higher. Conversely, if the supply of labour is greater than the demand, then wages will be lower.

➡️ Labour Market Conditions: The demand for labour is also affected by the overall economic conditions in the labour market. If the economy is doing well, then businesses will be more likely to hire workers, leading to an increase in demand for labour. Conversely, if the economy is in a recession, businesses may be less likely to hire, leading to a decrease in demand for labour.

➡️ Technology: Technological advances can also affect the demand for labour. If a new technology is introduced that can do the same job as a human worker, then the demand for labour in that occupation may decrease. Conversely, if a new technology is introduced that requires more human workers, then the demand for labour in that occupation may increase.

➡️ Changes in the price of labour: An increase in the price of labour will cause a shift in the demand curve for labour to the left, while a decrease in the price of labour will cause a shift in the demand curve for labour to the right.
➡️ Changes in the price of related goods and services: An increase in the price of related goods and services will cause a shift in the demand curve for labour to the right, while a decrease in the price of related goods and services will cause a shift in the demand curve for labour to the left.
➡️ Changes in the number of firms or occupations: An increase in the number of firms or occupations will cause a movement along the demand curve for labour to the right, while a decrease in the number of firms or occupations will cause a movement along the demand curve for labour to the left.

➡️ MRP theory states that the value of a factor of production (e.g. labour) is determined by the marginal revenue product (MRP) it generates. This is calculated by multiplying the marginal physical product (MPP) of the factor by the marginal revenue (MR) of the output.
➡️ MRP theory is used to explain the demand for factors of production, and how firms decide how much to pay for them. It suggests that firms will pay a factor of production up to the point where the MRP is equal to the factor's price.
➡️ MRP theory is also used to explain the distribution of income in an economy, as it suggests that the factors of production that generate the highest MRP will receive the highest incomes.

➡️ Marginal Revenue Product (MRP) is the additional revenue generated by employing one additional unit of a particular factor of production. It is calculated by multiplying the marginal physical product (MPP) of the factor by the marginal revenue (MR) of the product.
➡️ MRP is an important concept in economics as it helps to determine the optimal level of production and the optimal combination of factors of production. It also helps to determine the optimal price of a product or service.
➡️ MRP is used to determine the optimal level of employment for a particular factor of production. It is also used to determine the optimal wage rate for a particular factor of production.