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

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

Exchange of goods or services is referred as trade. Increased trade would directly have an
impact and make everyone better. This would mean that the people can then focus on their
efficiencies and ensure that they produce the products which gives them the highest revenue or
income. They can then depend on others for the supply of goods which they need but are
unable to produce. This gives rise to specialization and countries can gain the maximum
amount of efficiency and expertise in the long run. Furthermore, trade would always mean that
the exchange of goods would be at a profit. This profit would directly represent the incomes of
the people who are trading. The more there is exchange there would be greater amount of
income in the economy which would mean that they would be able to procure greater amount
of goods and services. This would raise their standard of living too. thus, in all terms trade if
conducted responsibly would make every one better off (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).

The place where the buyers and sellers can interact and sell or buy their products is referred as
a market. Economic activity includes the process of identifying the products which are to be
produced, how they are produced, the amount of goods to be produced and to sell it to whom.
The market would operate in the way that the people would identify the type of products
which would be needed for their customers. They would also arrange the resources which are
needed for the production of the goods which are demanded. Their resources or capital would
determine to the extent to which they can fulfill the demand. the invisible hand would be the
major force in ensuring that the market equilibrium could be reached. This would also mean
that the sellers and the buyers would have the market to decide for the price which would be
prevailing in the market. The sellers must maintain efficiency and control their costs to ensure
that they can sell their products in the market. The invisible hand would work to ensure that
the prices are set through the market equilibrium. it would also mean that the sellers would
work to ensure that they are efficient and able to compete in the market. Thus the
development of the market would always relate to a betterment of the economy.

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

Government play an integral role in improvising the market outcomes. They can take measures
to ensure that the economic activity is enhanced and the overall GDP can be improved. One
such example could be the use of effective law and order in the economy. This might mean that
the enforcement of contracts could be an ideal way the government can ensure that the
market outcomes can be improved. In a similar fashion the government can also ensure that
the efficiency of the firms are improved. They can use various legislations to ensure that the
companies are forced to follow. This could be related to product materials or the production
process. All this would lead to greater efficiency and help to improve the market outcomes too.
the government can also play a crucial role to increase competition in the market. They can
police the anti-competition activities like collusion between firms and also ensure that the
competition between the firms is fair. There are not unethical practices being used in times of
strategies used to harm the customers. Thus, in all terms the government can play a massive
role to support the economy and improve the economic activity and 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).

A countries standard of living actually depends on the ability to produce goods and services. If a
country is able to produce more goods they are in a chance to have a higher incomes. For
example country A is able to produce 100 Million Tons of grain while Country B is able to
produce 200 Million Tons of grain. This is a clear indication that country B would have a higher
standard of living due to the fact that the revenue and profit from sales of the extra amount of
grain would give them. this extra revenue would mean that the country would now be in a
position to spend more on their education and other needs. All those would eventually help
them to have a improved standard of living.

References

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