EconoHeart

Today's writing is a bit longer, but quite important, so brace yourself and read patiently. 😀 Demography in Economics is another aspect we shall learn in today's blog to understand an economy in a whole. This is the study of human populations and their characteristics, involving various statistical data related to population dynamics, eg. birth and death rates, age structure, geography, timelines etc. The field of demography is closely linked to economics because population trends and dynamics significantly influence economic development, resource allocation, labor markets, and social welfare. Let's see some key aspects of demography in economics: 1. Population Growth: Demography helps to examine the growth or decline of populations. It affects economic variables like labor supply, demand for goods and services and the overall size of the market. Rapid population growth can present challenges like high unemployment rates and strain on public resources. But slow population ...

Elasticity is one of the very basic concept of Economics and helps to understand how consumers (also called buyers) and producers (also called sellers) react to price changes, making it a crucial concept for pricing strategies and understanding how an economy behave. There are various types of elasticity, but for now we'll see the price one, having two main types: price elasticity of demand and price elasticity of supply. Price elasticity of demand is how much people change the amount they want to buy when the price changes. If something is "elastic," people are very sensitive to the price, so if the price of that item goes up, they'll buy less of it or look for alternatives that cost lesser. And if it's "inelastic," people will still buy the same amount no matter how much the price changes. A good example of inelasticity is medicines. Doesn't matter their prices go up or down, you'll still need to buy to save your health! Now, for elastic demand...

Imagine you have some dollars and you want to buy a subscription service with them. You like to buy maybe Netflix or Spotify or anything you wish. For simplicity, let's consider the two options Netflix and Spotify, both which you love to get. But here's the thing: you only have enough dollars to buy one subscription at present time. So, you have to make a choice between either Netflix or Spotify. The opportunity cost is the one that you didn't choose to buy, the one that you gave up when you decided to buy the other. So, if you choose to buy Netflix, the opportunity cost is Spotify because you can't buy it anymore. Opportunity cost is the fundamental economic concept of the value of the next best alternative forgone when making a choice. It highlights the inherent trade-offs individuals, businesses, and societies face when allocating scarce resources among competing uses. When making decisions, there are always multiple options available. But sometimes due to limited re...