Usually a person is not qualified to use the name “economist” without a graduate degree in economics. By this definition, there are about 100 000 economists in the US.
About half of them are academic economists, who engage in teaching, writing and doing research in colleges and universities. They also write textbooks and journal articles, develop and test new theoretical models, provide consulting services to governments and businesses, and engage in a variety of other professional activities. The other half of the profession works for business or government. Business economists forecast sales and costs, help firms anticipate (or try to influence) government policy. Some business economists work for private lobbying organizations, helping them prepare their arguments to try to affect tax laws, regulations, etc. which are important to particular kinds of Industries.Government economists also perform a variety of useful tasks. Often the government economist wears a second hat as a policy analyst. Economists forecast tax revenues and Interest rates, analyze who gains and who loses from particular changes, monitor prices, compute total output and perform other useful tasks in the public sector.In the broader sense, economists study the ways in which people deal with the problems of
The notion of a “free market” where all economic decisions regarding transfers of money, goods, and services take place on a voluntary basis, free of coercive influence, is commonly considered to be an essential characteristic of capitalism.
A legal system that grants and protects property rights provides property owners the entitlement to sell their property in accordance with their own valuation of that property; if there are no willing buyers at their offered price they have the freedom to retain it. According to standard capitalist theory, as explained by Adam Smith, when individuals make a trade they value what they are purchasing more than they value what they are giving in exchange for a commodity. If were not the case this, then they would not make the trade but retain ownership of the more valuable commodity. This notion underlies the concept of mutually-beneficial trade where it is held that both sides tend to benefit by an exchange.
The prices buyers are willing to pay for a commodity and the prices at which sellers are willing to part with that commodity are directly influenced by supply and demand (as well as the quantity to be traded). In abstract terms, the price is thus defined as the equilibrium point of the demand and the supply curves, which represent the prices at which buyers would buy (and sellers sell) certain quantities of the good in question.
A market failure is a case in which a market fails to efficiently provide or allocate goods and services (for example, a failure to allocate goods in ways some see as socially or morally preferable).. Another critique is that free markets usually fail to deal with the problem of externalities, where an action by an agent positively or negatively affects another agent without any compensation taking place.