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Explain how the price system eliminates a surplus.
The meaning of surplus is that quantity demanded is less as compared to the quantity supplied. This will lead to downward pressure on price. Since price falls, quantity demanded rises and quantity supplied falls. This will carry on until quantity demanded is equal to quantity supplied.
An economy can produce a maximum of either 28 million tons of wheat or 7,000 automobiles, or various intermediate quantities, as depicted in the table below:
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DISCUSS THE COMPENSATION PRINCIPLE OF KALDOR -HICKS
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Economic Development The word development is from the Latin root ‘Voloper’ which meant wrap up, envelop. The English used this word along with ‘des’ meaning ‘undo’. The word
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