Question

Define correspondence, subsidiarity, economies of scale, and poverty trap in terms of economics

Answer 1

Currespondance

In the demand theory ,the market demand function will not be single-valued.in the case of multi valued function occured , use a new analytical tool, that is called the multivalued function or correspondence. A correspondence defined as  f from a set X to a set Y , denoted f : X →→ Y , is a function from X to the set 2Y of all subsets of Y . Correspondences are also called multivalued functions.The term correspondence has a number of related meanings in mathematics. In economics, or at least game theory, we typically use it to mean a multivalued function. A function is only multivalued if at least one input is associated with at least two outputs.Correspondence simply whenever it's not obvious that each input has a unique output a correspondence is a function that may or may not be multivalued.

The term currespondence used in business, business is considered as an example of economics activity in that case, the term currespondence has an another meanig in economics ,Any communication in the form of the letter is called correspondence in business. One who can also ask any doubt or uncertainty through business correspondence. A businessman, who writes and receives letters in his day to day life to maintain the business between two organizations or within an organization comes undercurrespondence. A letter to a producer, complaint letters, letter of inquiry, job application letters are some of its examples of business currespondence.

Subsidiarity

Subsidiarity principle is principle of an economic efficiency, which means that economic value creation is contributed by the smallest possible units in accordance with the technological necessary of production.For instance , considerd the textile industry would be provided by a large number of small units scattered across the country, at the same time expand to an industrial productions would be based at a few central locations, and highly specialized innovative projects at a one Asian, European or even global location.

Economies of Scale

Which refers to the cost advantage experience of a firm while it increases its level of output. The cost advantage occured due to the inverse relationship between per-unit fixed cost and the quantity produced. Through the Economies of scale production become cost advantage due to company increases their scale of production and becomes more efficient,this will resulting in a decreased cost-per-unit. Which will lead to the cost of production is reach over all units of production.This will inrease the overall production.

Poverty Trap

A poverty trap is a mechanism , which is determined the , how much capital acuumulation needed to overcome the poverty prevails.So that each poverty trap creates it very difficulty for people to escape poverty. A poverty trap is created while an economic system need a significant amount of capital in order to earn enough to escape poverty. When individuals lack this capital, they may also find it difficult to make up it, this will creating a self-reinforcing cycle of poverty.That is called poverty trap.