Economics mantra
people make choices with scarce resource, and they interact with others when they make these choices.
Following by economic interaction
Specialization, Division of labor, Comparative advantage
Roles of government (to ensure that trade can happen)
1. Predictable policy framework
2. Rule of law (e.g. property rights)
3. Reliance on market economy
4. Good incentives
5. Specific role of government
Production possibilities curve
The work of an economist
Observation, Explanation, Recommendations
Demand
nagative relationship between the price of a good and the quantity demanded by consumers
Supply
positive relationship between the price of a good and the quantity supplied by firms
Market Equilibriem
The equilibrium price and equilibrium quantity are determined by the intersection of the supply curve and the demand curve
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