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Principles of economics

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Running head: PRINCIPLES OF ECONOMICSPrinciples of EconomicsNameInstitutionCourseInstructorDate1PRINCIPLES OF ECONOMICS2Economists are scientists because they development models and hypotheses that can betested by using data (Stonecash & Mankiw, 2011). The models result in predictions, andsometimes these are off the mark. Data allow an economist to describe what people do, this iscalled positive economics, for examples, by how much does petroleum consumption change ifthe gas tax is changed? Economists also recommend what ought to be done, called normativeeconomics. For example, should the petroleum tax be changed? What are the effects of legalizingabortion (positive)? Should abortion be legalized (normative)? (Stonecash & Mankiw, 2011).Perhaps one of the major contributions of economists is that they contributive to identifyingwinners and losers from public policy changes think increasing the minimum wage, and privatemarket changes, think the sale of Budweiser to a foreign company. Private markets are economicinstitutions that allocate scarce resources through the price system (Stonecash & Mankiw, 2011).The rule of law to protect property rights and enforce contracts is essential for a well-oiledmarket. The economic way of thinking allows one to identify winners and losers when resourcesare reallocated. It is almost never the case that the proposed change will have only winners.When you hear it is in the public interest, ask the speaker to define

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