Economics is not as formidable as it may sound. It has to do with voluntary exchange of goods (things we make or wish to buy) and services (help we hire or offer to provide).
Macro economics is taught in government schools and colleges. It takes a top-down view of what is going on in a country.
Macro economics passes judgement on whether the central bank should raise or lower interest rates, whether more or less money should be supplied, and whether tax rates should be lowered or raised so as to stimulate investment or consumption. The assumption of macro economics is that wise people close to government can control what the economy does. It is arrogant, and it is ruinous. Nobody is actually smart enough to do it right.
Micro economics in contrast concerns itself with what individuals may or may not do, and then tries to add it up to form a total for the economy. It provides a bottom-up perspective. With millions of individuals to understand it too is imprecise, which is why there are several viewpoints within this broad grouping. But at least micro economics starts the right way up.
There is a strong, real-world relationship between these three parameters. The higher the price, the lower the demand. Demand means the quantity buyers will purchase. Most would like an expensive brand, but most buy the cheaper brand.
Why? Because ‘would like’ is not the same as ‘demand.’ Demand is the wish plus the money. What producers can make or supply also depends on the price they can sell something for. The higher the price buyers are willing to pay the higher the supply that will be produced, and vice versa. When supply and demand meet, there is an equilibrium. That is the price at which producers and buyers are equally satisfied with the deal.
Competition indirectly effects the equilibrium as it motivates suppliers to be more eager to keep their costs down and the prices at which they can afford to sell. This minimises waste and benefits the buyer.
Is it important for all prices been bid and offered to be equally visible to all participants? It is not essential. If you are overcharged at one vendor, you can choose to not patronise that vendor again, and they know that. Partial knowledge is good enough in practice. As the Internet becomes more of a marketplace, visibility will come closer to perfection.
Nobody has an exclusive claim to a job, except under the contract they sign with their employer. A ‘job’ is not something that anyone can possess. People will keep their job as long as their employer thinks they are getting their money’s worth out of what they are paying you. If they were forced to pay you when they did not want to, they would be your slave.
Anyone wanting to be paid needs to ‘sell themselves.’ That means to offer benefits to someone who might be willing to pay for them. If you are job-hunting or job-holding you are a supplier of services and your salary is the price your employer is willing to pay. Their demand will be their wish to hire you plus the money they pay you. If you are not bringing them as much profit as the money they give you, it is rational for them to let you go, subject to the terms of the contract between you.
Two reasons: Investment and trade. Both depend on freedom.
This means not consuming all that is produced, but taking some of it and buying equipment that will make future production easier. This makes it possible to expand business without extra labour, enabling more saving and the building of wealth. Tragedy is, governments usually intervene in a variety of ways so that in most countries of the world poverty still remains.
This means that the members of society are free to exchange what they produce not only with each other, but with other societies as well. This is important because few countries have all they need for economic growth. Tragedy is, government often intervenes to prevent or hinder free trade by imposing import tariffs to distort the apparent prices of available goods. The result is continuing poverty.