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Who benefits when a government subsidizes a purchase?

A payment aimed at buyers can also affect what sellers receive. In a simple competitive-market model, a subsidy changes the gap between the buyer’s out-of-pocket price and the seller’s revenue. The interesting question is how the benefit is divided, and what assumptions would have to hold before the model described a real policy.

3–7 min

Questions you could explore

  • How might the result change if supply cannot expand easily?
  • Which costs or social benefits does the simplified model leave out?

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Economics and money

Why can Ireland’s inflation rate differ from your shopping bill?

A national price index combines many purchases that no single household makes in exactly the same proportions. Ireland's Consumer Price Index uses spending weights, so changes in different prices contribute unequally to the overall figure.

4–5 min

Why can Ireland’s inflation rate differ from your shopping bill?

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What does a free afternoon still cost you?

An hour can be free of charges and still be scarce. Choosing one use means giving up the best available alternative, which is the opportunity cost even when no money changes hands.

3–5 min

What does a free afternoon still cost you?

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Economics and money

How can insurance spread financial risk across a group?

An uncertain large loss for one person can become part of a wider pool of risks. Insurance connects that pooling with a contract and a premium, while the contract still determines which losses are covered.

3–7 min

How can insurance spread financial risk across a group?

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