Marxian Capital Accumulation, Value Theories & Walrasian Equilibrium
Marxian Theory of Capital Accumulation
Karl Marx’s theory of capital accumulation emphasizes the role of exploitation and class struggle in the capitalist system. According to Marx, capital accumulation is driven by the pursuit of profit and the exploitation of labor.
Key elements
- Labor theory of value: Marx’s theory is based on the labor theory of value, which states that the value of a commodity is determined by the socially necessary labor time required to produce it.
- Exploitation: Marx argued that
Oligopoly Pricing, Keynesian Theory, and National Income Metrics
Oligopoly Price Leadership Models
In an Oligopoly, firms are interdependent, meaning one firm’s pricing decision directly affects others. To avoid destructive price wars, firms often adopt a Price Leadership Model, where one firm (the “leader”) sets the price, and others (the “followers”) match it.
Types of Price Leadership
There are three primary forms of price leadership based on how the leader is established:
1. Dominant Firm Price Leadership
- Description: A single firm controls a massive share of
Macroeconomic Equilibrium: IS-LM and WS-PS Analysis
IS-LM Model in a Closed Economy
QUESTION 1:
Consider a closed economy defined by the following equations:
- Consumption (C): 200 + 0.4(Y – T)
- Investment (I): 150 + 0.1Y – 1000(r + x)
- Government Spending (G): 250
- Taxes (T): 100 + 0.2Y
- Real Interest Rate (r): 0.05 (Set by the Central Bank)
- Risk Premium (x): 0.02
Equilibrium Output and the IS Relation
To find the IS relation, we start from the goods market equilibrium condition (Y = Z):
Y = [200 + 0.4(Y – (100 + 0.2Y))] + [150 + 0.1Y – 1000(r + x)] + 250
- Calculating
Food Economics: Demand, Supply, Elasticity & Population
Lecture 7: Demand, Supply, Elasticity
Lectures:
Lecture 7: Economic frameworks to study the world food problem — demand, supply, and elasticity.
Demand Curve
The demand curve follows the Law of Demand: as price falls, quantity demanded rises, producing a downward slope. This occurs because of:
- Diminishing marginal utility — less satisfaction from extra units;
- Heterogeneity in demand — different people have different willingness to pay.
The entire demand curve can shift based on changes in consumer
Read MoreKautilya’s Arthashastra: Economic Principles and Statecraft
Kautilya’s Economic Philosophy and the Arthashastra
Introduction to Kautilya
Kautilya, also known as Chanakya or Vishnugupta, was a distinguished Acharya (professor), philosopher, and the influential Prime Minister to Emperor Chandragupta of the Maurya Empire. He was instrumental in overthrowing the oppressive and corrupt Nanda dynasty, securing the throne for Chandragupta between 321–297 BCE.
Kautilya provided crucial advice on both political and economic matters. His policy approach was inherently
Read MoreKey Economics Concepts: Demand, Markets, Money, Inflation
What Is Demand? Its Determinants
Demand refers to the quantity of a commodity that consumers are willing and able to buy at a given price and time.
Determinants of Demand
- Price of the commodity: Demand decreases when price increases and vice versa.
- Income of consumers: Higher income increases demand for normal goods.
- Price of related goods:
- Substitute goods: If the price of a substitute rises, demand increases.
- Complementary goods: If the price of a complement rises, demand decreases.
- Taste and preference: