The market: Introduction
- Cecilie 🇩🇰
- 26. aug. 2016
- 1 min læsning
Terms
⭐️ Assets are properties than can be sold, e.g. cars and shares.
⭐️ Passives are more or less like debt.
⭐️ Scarcity: Economic ressources are scarce and they therefore have to be prioritised.
Laws
🔒 The law of scarcity: Human needs are always bigger than the scarce resources → the use of the scarce resources has to be prioritised.
Fundamental Assumption:
Human needs are always infinite + resources are scarce.
How the resources are prioritised depends on preferences.
Economics as a science can help determine how the scarce resources are to be used as efficiently has possible.
→ The market forces which are controlled by the price mechanism are usually going to present the most efficient allocation of the scarce resources.
❗️ Scarcity ≠ poverty
❗️ Needs > the amount of resources
❗️ Market mechanism ≠ fair