Comparative Advantage Definition
Governments around the world impose rules, regulations and restrictions like:
These practices ensure that comparative advantage does not benefit all like it should, and stifles equality and growth of small players.
SIMILAR ARTICLES & IDEAS:
Marginal benefit and marginal cost are two measures of how the cost or value of a product changes.
A marginal benefit change in a consumer's advantage if they use an additional unit of a good or service.
A marginal benefit usually declines as consumption increases. For example, the consumer may buy one ring for $100, but only willing to buy another if the second ring is $50. The consumer's marginal benefit reduces from $100 to $50 from the first to the second good.
Producers consider marginal cost, which is the small but measurable change in the expense to the business if it produces one additional unit.
In producing a product, efficiency in productivity can result in making more products in the same amount of time. The cost of raw materials may also go down if it is purchased in bulk, therefore, decreasing the marginal cost.
A financial crisis is often associated with a panic or a bank run where investors sell off assets or withdraw money from savings accounts.
Generally, a crisis is caused if institutions or assets are overvalued, and can be worsened by panic and herd-like investor behaviour.
Contributing factors include systemic failures, unexpected or uncontrollable human behaviour, regulatory absence or failures, or contagions that is like a virus that spread from one institution or country to the next. If left unchecked, an economic crisis can cause a recession or depression.