Blog topic
Economics articles
Supply and demand, opportunity cost, inflation, GDP, unemployment, compound interest, elasticity, monopolies, public goods and the tools of fiscal and monetary policy. The pieces are built around worked examples, so the abstractions come with numbers attached.
32 explainers, newest first. Each one ends with real questions from the unit that teaches it, so you can read the explanation and then check whether it stuck.
These are the readable companion to the Economics track, which holds 18 units and 2,144 practice questions. If you are starting the subject rather than looking something up, the study guide is the better place to begin.
What Is Credit? How Borrowing Works and How Lenders Decide
Credit is the trust that lets you use money now and pay later. How interest prices it, what a credit score measures, and why loans cost people different sums.
September 15, 20265 min readWhat Is a Cartel? Why Rivals Agree Not to Compete
A cartel is an agreement among competitors to fix prices, limit output or divide markets, to charge as a monopoly would. Why they form and why they break.
September 15, 20265 min readWhat Is a Trade Deficit? Why Importing More Than You Export Is Not Always Bad
A trade deficit means a country buys more from abroad than it sells, and the gap is paid by borrowing or selling assets. What it measures, and when it bites.
September 15, 20265 min readWhat Is Venture Capital? Betting on Ten Companies to Find the One
Venture capital is money invested in young companies for shares, on the expectation that most will fail and one will pay for the rest. How the funds work.
September 15, 20265 min readWhy Does Money Have Value? Paper, Trust and the State
A banknote costs pence to print and is worth what it says because everyone accepts it. How money became a promise, and what keeps the promise good.
September 14, 20264 min readWhat Is an Economic Bubble? Tulips, Railways, Houses and Why It Keeps Happening
A bubble is a price driven by the expectation of selling to someone else at a higher one. How they inflate, why sensible people join in, and how they end.
September 14, 20265 min readWhat Is the Prisoner's Dilemma? Why Rational People Fail to Cooperate
Two suspects, each better off confessing whatever the other does, both end up worse than if they had stayed silent.
September 14, 20264 min readWhat Is Purchasing Power Parity? Why the Same Burger Costs Different Amounts
Exchange rates say what a currency buys abroad; purchasing power parity says what it buys at home. Why they differ and which to use when comparing countries.
September 14, 20264 min readHow Does the Stock Market Work? Shares, Prices and What Moves Them
A share is a slice of a company, and the stock market is where slices change hands. Why companies sell them, how a price is set, and what an index measures.
September 14, 20265 min readHow Does Insurance Work? Pooling Risk So That Nobody Is Ruined
Insurance turns a large uncertain loss into a small certain payment by pooling many people's risks. How premiums are set, why pools fail, and where it began.
September 14, 20265 min readHow Does Bitcoin Work? A Ledger With No Bank Behind It
Bitcoin is a shared public ledger kept honest by cryptography and competition rather than a bank. How transactions are recorded, what mining is, and its limits.
September 14, 20265 min readWhat Is Marginal Cost? A Simple Economics Explanation
Learn how economists measure the extra cost of producing one more unit and why it matters for output, pricing, and decisions.
August 17, 20266 min readWhat Is a Negative Externality? Costs That Spill Onto Others
Learn how private decisions can create costs for other people, why markets may overproduce them, and how policy can respond.
August 17, 20265 min readWhat Is a Public Good? Why Some Benefits Are Hard to Sell
Learn how non-rivalry and non-excludability create the free-rider problem and why markets may provide too little of some shared benefits.
August 17, 20265 min readWhat Is a Price Ceiling? How a Maximum Legal Price Affects Markets
Learn how a legal maximum price works, when it becomes binding, and why shortages, queues, and other tradeoffs can follow.
August 17, 20265 min readWhat Is a Price Floor? How a Minimum Legal Price Affects Markets
Learn what a price floor is, when a legal minimum price becomes binding, and how it can affect buyers, sellers, surpluses, wages, and policy choices.
August 17, 20265 min readWhat Is Consumer Surplus? The Gap Between Willingness to Pay and Price
Learn what consumer surplus is, how willingness to pay differs from market price, and how economists use the idea to study gains from exchange and policy.
August 17, 20265 min readWhat Is the Unemployment Rate? How Economists Measure Joblessness
Learn who counts as unemployed, how the labour force is defined, and why the headline number has important limits.
August 14, 20265 min readCompound Interest Formula: How Money Grows Over Time
The compound interest formula shows how interest can earn interest over time. Learn each part of the formula, compounding periods, and simple examples.
August 14, 20265 min readPrice Elasticity of Demand: How Buyers Respond to Price Changes
Price elasticity of demand measures how strongly quantity demanded responds to a price change. Learn the formula, examples, and what elastic demand means.
August 14, 20266 min readComparative Advantage Explained with Simple Trade Examples
Comparative advantage explained simply: learn how lower opportunity cost can make specialisation and trade useful even when one side is better at everything.
August 14, 20266 min readWhat Is Fiscal Policy? Government Spending and Taxes Explained
Learn how governments use spending and taxes to influence demand, public services, deficits, employment, and economic activity.
August 14, 20266 min readWhat Is Monetary Policy? How Central Banks Influence the Economy
Learn how central banks use interest rates and other tools to influence inflation, borrowing, spending, and economic activity.
August 14, 20266 min readWhat Is a Recession? How Economic Downturns Are Identified
Learn how economists recognise a broad decline in activity, what usually changes during a downturn, and why one measure is not enough.
August 14, 20266 min readWhat Is a Monopoly? Market Power and Competition Explained
Learn how one dominant seller can gain market power, why barriers to entry matter, and how monopoly can affect prices and choice.
August 14, 20266 min readWhat Is a Market Economy? How Prices and Choices Coordinate Activity
Learn how prices, private choices, supply and demand, competition, and government rules shape this economic system.
August 14, 20266 min readWhat Is Scarcity in Economics? Why Choices Have Tradeoffs
Learn why limited resources force choices, create opportunity costs, and shape decisions by people, firms, and governments.
August 14, 20266 min readWhat Is a Tariff? How Taxes on Imports Affect Trade
Learn how taxes on imported goods affect prices, producers, consumers, government revenue, supply chains, and international trade.
August 14, 20266 min readSupply and Demand Explained in Simple Terms
Supply and demand explain how buyers and sellers interact in markets. Learn why prices change, what shifts curves, and how shortages and surpluses can appear.
August 13, 20265 min readOpportunity Cost Explained with Everyday Examples
Opportunity cost is the value of the best alternative you give up when you choose. Learn how economists use it to think about time, money, and trade-offs.
August 13, 20265 min readWhat Is Inflation? Why Prices Rise Over Time
Learn how a general rise in prices affects purchasing power, how inflation is measured, and why its causes can differ across an economy.
August 13, 20265 min readWhat Is GDP? How Gross Domestic Product Measures an Economy
Learn how gross domestic product measures economic production, how nominal and real GDP differ, and what GDP can and cannot tell you.
August 13, 20265 min read