Mostly issued by financial institutions, a letter of credit (LC) is a standard document which is primarily used in the trade finances to provide irrevocable payment undertakings
Financial economics is a field of economics that deals with the deployment and allocation of resources, in an uncertain environment, across time as well as spatially and blends the study of finance with the methodology of economicsSearch
Urban Economics
In broader terms, urban economics is the study of urban areas. It uses economic tools to analyze the urban issues that include housing, education, public transit, local government finance and crime. In narrower terms, urban economics is a branch of microeconomics that emphasizes on the spatial arrangement of households, firms and capital in a metropolitan area, and the public policy issues that arise from their interplay.
It was William Alonso, von Thunen, Losch and Christaller who initiated the process of spatial economic analysis and rooted urban economics in their location theories. Generally, economics studies the allocation of limited resources effectively and since all economic phenomenons take place within a geographical ‘spatial’ or space, urban economics thus focuses on the allocation of resources across such spatial structures in relation with the urban areas.
Health Economics
A field in applied microeconomics, health economics deals with the issues that relate to the availability of health and healthcare from an economic perspective. On a broader arena, health economists take up the study of operations and functioning of the system of healthcare and the social as well as private causes of health affecting demeanor, like smoking. Examining the economy of healthcare can provide crucial information for such economists in analyzing the effectiveness and efficiency of the healthcare system. Also if there exist wide differences in the health care of a particular region, economic analysis can be an instrumental step to understand the methods of correcting those.
Health economics, according to Alan Williams’ ‘plumbing diagram’ consists of 8 distinct topics.
Public Finance
Public finance is a field in economics that hovers around the subject of government activities, and their administration and design. It primarily concerns with how the governments allocate the resources and spend money for their activities. The broader term for public finance is ‘public economics’, whereas, the narrow term is ‘government finance’. Public finance mainly covers the effects of the government on the allocation (efficient) of resources, macroeconomic stabilization and the income distribution.
The field focuses on role of the government in the society more. Public finance theory expresses that if private markets allocate goods and services effectively to and fairly to everyone, there would not be any need of a government or governing entity. However that is not the case in real scenarios and hence there is a need of a government to ensure that people with very less or no money have access to basic services like food and medical care.
Labor Economics
Labor economics, like industrial organization is studied in two forms, viz. macroeconomics and microeconomics. It can be seen generally as the application of techniques to the labor market from viewpoints of both micro and macro economics. The macroeconomics techniques cover a wider area studying the interrelations between the labor market, foreign trade markets, money markets and the goods markets. It also studies as to how these influence the other macro variables like the employment levels, aggregate income, participation rates and GDP (Gross Domestic Product). On the other hand, microeconomics (neoclassical) analyzes and studies the roles of individuals and individual firms in the labor market. The other issues explored through the subject include social dynamics and the influence of education on labor and it also includes the interrelations between labor force, employers and wages.
Oligopoly and Duopoly
What is Oligopoly?
Oligopoly, like monopoly is a market form where the market or the industry is controlled or dominated by small group of sellers/companies also known as oligopolists. It is much like monopoly where the small group is made up of major sellers/companies which collectively exert control over the supply of a particular product (good or service) and its price in the market. Since the number of competitors in an oligopoly is few, each of the oligopolist is most likely to be aware of the actions of the others and hence the decision of one company influences and is influenced by the decision of the others. Hence, strategic planning by the oligopolists’ needs to consider the responses of other market players as well.
A ‘cartel’ is a type of oligopoly in which the participating firms may employ restrictive tactics such as collusion and market sharing to escalate prices and restrict production just as in a monopoly.
Monopoly
Monopoly is that situation in economics where a single company or group controls all or almost all of the market for an irreplaceable good or service. This is characterized by the absence of competition due to which the company/firm in question is the only provider for that particular good or service and can charge whatever it wants which in turn often result in goods or services with high prices and inferior quality. In this event, the firm in question is said to be monopolizing the section or segment of the market. Monopoly is hence detrimental to market competition which is the foundation of a healthy economy.
In a textbook case of monopoly, only one firm produces the product (good or service) whereas in the real world scenario, in a monopoly, the firm controls majority of the sales of that product.
Industrial Organization
Industrial organization is a field of applied microeconomics that deals with the workings of markets and industries and especially the way the businesses in these markets compete with each other. The main goal of industrial organization is to increase or maximize the efficiency of the business in such a way that it is poised to compete in the market more effectively. This is achieved by refining and adapting the structure and operating processes of the business such that they can conform with the latest happenings of the wider market.
Industrial organization studies the model of ‘perfect competition’ and adds to it the real world characteristics or frictions such as transaction costs, limited information, government actions, cost of adjusting prices and barriers to entry that may be associated with imperfect competition. It has been described as a subject dealing with markets that are difficult to analyze by making use of the standard textbook competitive model. Industrial organization has two major distinctions for studies.