## Ricardian Theory of Rent – Assumptions-Criticisms & Diagram

The theory was presented by David Ricardo. He presented his theory in his book “Principles of Political Economy and Taxation” in 1817. As per his definition “Rent is paid to the landlord for the original and indestructible powers of the soil” So, according to him, the rent arises because of its scarcity and also of…

## Law of Demand, Assumptions, Schedule, Example & Exceptions

Law of Demand, Assumptions, Schedule, Example & Exceptions. To clearly understand the law of demand, we must first know what demand is. So, we will first explain the meaning of demand, then we will move towards the law of demand definition, assumptions of the law of demand, the exception to the law of demand, demand…

## Law of supply Definition, schedule, example and supply curve

So, Before starting to understand the law of supply, it is essential to understand what supply is. Definition of Supply Supply can be defined as “the quantity of goods or services offered for sale at a certain price”. Simply, supply is the relationship between prices of the product and quantity supplied of that product. The…

## Law of Variable Proportion, and Returns to Scale with diagram

Definition of the Law of Variable Proportion: The Law of variable proportion has great importance and applicability in the field of economics. According to this law ‘with the increment in the units of variable factors i.e., labor or capital, and the fixed factor being constant, the marginal product first tends to increase, becomes constant and…

## Income Elasticity of Demand-its Types and Significance

Income elasticity of demand is the change in quantity demanded brought by the change in income of the consumer. So, income elasticity of demand can be properly defined as “The degree of responsiveness of the quantity demanded to a change in income of the consumer, other things being constant.” This is is one of the…

## The Classical Theory of Interest Rate-Explanation & Graph

The classical theory of interest rate states that people want their savings to be loaned for investment purposes. So, these are the people who supply capital for further investment. whereas in opposition to that, some people need capital in their business. Thus, they borrow the money on behalf of their firms. The people who require…