One of the ten principles of the economics “Trade Can Make Everyone Better Off”, explain

how and why? Minimum 100words, 2.5Marks).

Trade in its core concepts means that there would be an exchange of goods with money or
other goods. A country who is good in producing cars may focus on the production of cars and
depend on other countries for the supply of food items. This would mean that each country
would have the opportunity to specialize and build their expertise on it. Thus, trade would
eventually help each and every economy all around the world. Even if trade is to be identified in
the macro level. Trade would have a lot of benefits. In the domestic market the rise in the trade
would mean that more and more people would be exchanging their goods in return of money.
They would be selling the products at a profit which would then represent their income and
would devise their standard of living(Mankiw & Rashwan, 2018).

One of the ten principles of the economics “Markets Are Usually a Good Way to Organize
Economic Activity” explain how and why? Minimum 100words, 2.5Marks).

A place where buyers and sellers can conduct their transactions is considered to be a market.
Economic activity is referred to the process of the identifying the type of goods to be produced,
how to ensure that the production is undertaken place, the quantity of the production and the
target market.
In the market where there is little intervention and barriers the people would identify the
demand of the products in the market and also find ways to find the factors of production to
ensure that goods are produced and provided to the customers for whom the product had
been developed. The “invisible hand” would ensure that the prices are set in the market
equilibrium. The market would determine the fact that a seller must produce and sell within the
price which is being determined by the market forces. There would be a clear need for
efficiency for the companies where the lack of efficiency would lead to the business not being
able to operate in the market. Furthermore, the focus would always be on the production of
goods and services which the customers are demanding. The production of such goods would
bring employment in the economy and there would be an increase in the trade and commerce
within the economy. Thus, if markets are allowed to operate within their means can lead to
some development of the economic activity. (Mankiw & Rashwan, 2018).

One of the ten principles of the economics “Governments Can Sometimes Improve Market
Outcomes” explain how and why? Minimum 100words, 2.5Marks).

Governments can play a massive role in ensuring that the market outcomes can be improved.
They can be a major force in ensuring that the economy is revived and can play a massive role
in ensuring the betterment of the market outcomes. The government can enforce law and
order within the economy. This would mean that there would be fairness in the economy. The
investments would be deemed safe and would ensure that the businesses are able to conduct
their operations.

The government can ensure that they can enforce measures which would force the companies
to maintain efficiency. An example could be a mandatory use of ISO for the production of many
materials. This would ensure that the companies are efficient in their production.

Competition is always healthy for the consumers. High competition means that firms have to be
extremely efficient and have to keep their costs under control. The government can ensure that
there are anti-monopolistic measures and the companies cannot collude with each other and
charge higher prices to the customers. The government can ensure that there are laws which
would be needed to keep the interests of the customers. Thus, overall there is a direct way for
the governments to get have a direct way to affect the improve market outcomes.

One of the ten principles of the economics “A Country’s Standard of Living Depends on Its
Ability to Produce Goods & Services” explain how and why? Minimum 100words, 2.5Marks).

Productivity of a country would directly have an impact on the living standard. The amount of
goods and services produced at a given amount of time is referred to the productivity. The
higher the amount of goods and services are produced would mean that the chances of a
higher income increase. In the same note it can also be said that if a country is able to produce
1Million Labtops a year and a second country is able to produce 2 Million laptops a year. The
difference can be simple. The wages paid to the workers of the second country would be
higher. In the same manner the revenue for the second country would be higher too. this
would ensure that there would be increased profit and increased income. Higher income would
always lead to an improvement in the standard of living directly. This would mean that the
increased income of country B would lead to the people choosing better quality goods,
expenditure on healthcare, education etc. thus, the ability to produce goods and services would
have a direct say in the standard of living.

References

Mankiw, N. G., & Rashwan, M. H. (2018). Principles of economics: Arab world. Cengage.