Opportunity Cost Explained

Opportunity cost of a resource is referred to as the value of the next-highest-valued alternative use of that resource. Sounds way too technical, doesn’t it? Let’s try to simplify its meaning with an example. Suppose, at the ice cream parlor, you have to choose between choco chip and black current. If you choose choco chip, …

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The January Effect Explained

The month of January has an ambiance of new beginnings. As we enter the New Year, we are full of hope and motivation. While laymen worry about getting themselves summer ready, investors have other things to conceive. The straightforward phenomenon of another tax year beginning from January 1st, has led to the existence of the …

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Is Africa The New China?

Over the past 15 years, most African countries have sustained an economic growth with some places reporting an annual growth rate of more than 5% per annum. Service sector is blooming but Africa is still one of the poorest countries of the world. So how will it become the next China? Let’s find out. It …

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Walras’s Law Explained

We know that markets are constantly in flux and prices constantly change. The question is will there always be a price vector where all markets for different goods clear? Being that one of the principle focus of economics is understanding the determination of price, if equilibrium does not occur then we have a serious problem …

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Enron Scandal Explained

Enron was formed in 1985 by merging Houston Natural Gas Company and InterNorth Incorporated. Kenneth Lay became Enron’s CEO and chairman. Following the merger, Enron was branded as an energy trader and supplier. In 1990, Lay appointed Jeffrey Skilling to head the company. Enron, at one point valued 70 billion dollars, used to be the …

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How Does Money Work?

Imagine you sell milk for a living. You want to buy vegetables for your family. You approach the vendor and offer him milk for vegetables. But it turns out; he doesn’t need milk at the moment but he would buy eggs. You’re out of luck unless you can find another vendor who needs milk nearby. Or …

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