10/14/11

• Worker's Wages
• roughly in direct correlation with worker's productivity
• $25/hr then the worker's wage should be about $25
• Price System
• promotes better outcomes for the economic market than it would have without utilizing the price system
• Markets Often Don't Work Well
• "Lack of Existence"
• markets don't exist in certain situations
• ex: you wouldn't pay someone a dollar to go away because he/she was being irritable
• Institutions 
• "Efficiency"
• delivering what people want
• at lowest possible cost
• all the formal and informal mechanisms that we use to live peacefully with each other
• formal- legislation
• informal- customs
• ex: good law firm, legal system, government
• rule of law
• laws cannot be arbitrary
• everyone treated equally
• good laws must be general not specific
• Markets work well when both sides (buyer and consumer) have many options to consider
• Inflation
• general increase in ALL prices including wages
• caused when too much money is in circulation 
• Ethics in Economics
• free societies work better when they're honest
• cooperation between people is generally positive sum
• better morally for people to work for interests of others
• taken from the Golden Rule