Collegeeconomics

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Have you just started your investment journey and wondered how much to invest? Did you follow promising strategies but still see your account in red? Are you worried about the risk that you cannot foresee in your holdings? If you are nodding along these questions, know that you are not alone. In fact, these are what professionals like quants, ...

A very important concept when it comes to thinking about markets in economics is the idea of Pareto efficiency. An allocation of resources is Pareto efficient if it is not possible to make anyone better off without making someone else worse off.

Imagine that you and a friend are going to the movies. You like comedies more than action movies, while your friend likes action movies a lot more than comedies. If you go to see a movie alone, however, you’re probably not going to have as much fun, regardless of what type of movie you see. What is the optimal behavior for each person in this ...

You may have heard in your econ class about a good’s elasticity of demand, or about “elastic” or “inelastic” goods. Consumers’ elasticity of demand is just a fancy way economists talk about how sensitive people are to changes in a good’s price.

If you are a student of economics, one of the first axioms you are instructed to adapt is that everyone should be considered a “rational actor.” What this means is that all people who take part in economic decisions and transactions are informed by self-interest and do so in a manner that maximizes their potential self-benefit. This is essential ...

If you’re majoring in economics, you will likely also need to take a statistics course. One of the trickiest concepts is dealing with conditional probabilities. In most classes, they teach you a fairly complicated equation known as Bayes’ Theorem. While this isn’t a hard formula to plug values into, it doesn’t give an intuitive understanding ...

In this post, I start off by explaining the Marginal Rate of Substitution (Sections II-IV). Then, I cover the concept of Marginal Utility (Sections V-VII). In both cases, I start with a story explanation, then give a formal definition, and finally provide some other useful information about the concept. After that, I connect the two concepts ...