1. Why are there gains from trade?

Because not many self-sufficient individuals is the reason that there

are gains from trade when you divide tasks and trading, two people
can each get more of what they want than they could get by being
self-sufficient

2. When is an economic situation in

equilibrium?
When supply and demand are balanced and in the absence of external
influences the values of economic variables will not change.

3. According to the reading

assignment, what do economists
mean when they say that
resources should be used
efficiently to achieve society's
goals?
Economists say resources should be done efficiently they mean that
you got to use what you have to maximum, the text gives us an
example of a college classroom that is full of people, that is what you
want. For example in my family business, we do bread, so we got to
have all of the machines working at the max to be efficient.

4. Name two possible remedies

that governments may use to
improve society's welfare. Explain
these.
“• Individual actions have side effects that are not properly taken into
account by
the market. An example is an action that causes pollution.
• One party prevents mutually beneficial trades from occurring in an
attempt to
capture a greater share of resources for itself. An example is a drug
company
that prices a drug higher than the cost of producing it, making it
unaffordable
for some people who would benefit from it.”

5. What are the two outcomes

when overall spending gets out of
line with the economy's productive
capacity? Explain these.
1. Because not many self-sufficient individuals is the reason that
there are gains from trade when you divide tasks and trading,
two people can each get more of what they want than they
could get by being self-sufficient
2. When supply and demand are balanced and in the absence of
external influences the values of economic variables will not
change.
3. Economists say resources should be done efficiently they
mean that you got to use what you have to maximum; the text
gives us an example of a college classroom that is full of
people, that is what you want. For example, in my family
business, we do bread, so we got to have all of the machines
working at the max to be efficient
4. “• Individual actions have side effects that are not properly
taken into account by the market. An example is an action that
causes pollution.
• One party prevents mutually beneficial trades from occurring
in an attempt to capture a greater share of resources for itself.
An example is a drug company that prices a drug higher than
the cost of producing it, making it unaffordable for some people
who would benefit from it.”
5. The two outcomes are recession and inflation. Inflation is when
the producer rises the price and there are still customers that
buy the product and recession is when the economy of the
country goes down, like for example Nicaragua in these days.
 2. Economists say resources should be done efficiently they mean that
you got to use what you have to maximum, the text gives us an
example of a college classroom that is full of people, that is what you
want. For example in my family business, we do bread, so we got to
have all of the machines working at the max to be efficient.

4. “• Individual actions have side effects that are not properly taken
into account by
the market. An example is an action that causes pollution.
• One party prevents mutually beneficial trades from occurring in an
attempt to
capture a greater share of resources for itself. An example is a drug
company
that prices a drug higher than the cost of producing it, making it
unaffordable
for some people who would benefit from it.”

5. The two outcomes are recession and inflation. Inflation is when the producer
rises the price and there are still customers that buy the product and recession
is when the economy of the country goes down, like for example Nicaragua in
this days.