What are key laws to understand in Economics? What is the formula for each?
What are key laws to understand in Economics? What is the formula for each?
Law of Demand: This law states that as the price of a good or service increases, the demand for that good or service will decrease.
Law of Supply: This law states that as the price of a good or service increases, the quantity supplied will increase.
Law of Diminishing Marginal Utility: This law states that as a consumer consumes more of a good or service, the marginal utility (the satisfaction gained from consuming one additional unit) decreases.
Law of Diminishing Returns: This law states that as more of a factor of production is added, the marginal product (the increase in the total output due to one additional unit of the factor of production) decreases.
Law of Comparative Advantage: This law states that a country will benefit from specializing in producing goods or services for which it has a comparative advantage over other countries.
Law of Increasing Opportunity Cost: This law states that as more of a good or service is produced, the opportunity cost (the cost of the next best alternative foregone) increases.
Law of Supply and Demand: This law states that the price of a good or service is determined by the interaction of the supply and demand
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