While reading the book Naked Economics by Charles Wheelan in the pages from 17 to 22, there were several points made.
1. The market economy is a powerful force for making our lives better.
- Competition in business firms lowers the price and the cost of a product or a service, thus making the lives of costumers better.
2. Market is amoral.
- Market system does not protect the poor.
- Market system lacks moral in a process of rewarding scarcity and pricing any valuable product.
3. Price is the means of allocating scarce resources.
- Since there is a limited amount of resources, prices act as a medium of allocating the resources. The one pays more than another gets to be an owner of that resource.
4. Through pricing, most market are self-correcting itself.
5. If a government fixes price in a market system, private firms will find
some other ways to compete.
- When OPEC decides to cut off the production of oil, the price goes up. However, as the price goes up, some of its members start to opt out and cheat on that promise in order to sell their oil at best price.