Topic 1: Big Questions

In the small community of PAS, everyone is both a producer and consumer. In PAS, the school produces its service of education for the students and provides educated graduate for college. The students, of course, are the consumers that pay for the education. However, they also play a role of producer that sometimes gives lessons to teachers. The teachers thus always "updated" due to the reciprocal relation. The school produces the education through lectures as the students provide their latest information through the conversation during classes. It is ultimate the producer to choose what, how, and for whom the goods and services would be produced. The profit motive makes the producers choose the most efficient way to produce and targeting the potential consumers.

 

Every producer made their decisions out of self-interest. In the PAS example, the teachers might pursue their interest of desiring teaching and getting salary. Their interests could be achieved by working in PAS. They will give lectures while the students will pay the tuition. Thus at the same time the teachers can both fulfill the desire for teaching and receive payments. Also, the students are making the choice out their self-interest. They wanted to be educated (or at least their parents want them to be educated) and get into a good college so they choose to get in PAS. Not wasting their payments, they might work hard during class so that they could ensure they have a better chance for applying college.

Both the students and the teachers reflect that their self-interest can benefit the social interest. Social interest is seeking for pursuing the most efficient and fair use of resource. Efficiency can be achieved when the available resources are used to produce goods and services at the lowest possible cost and in the quantities that give the greatest possible benefit. Self-interest can provide this efficiency because of the profit motive base. The producer tends to try to minimize their cost and maximize the profits. Therefore it can make the best use of scarce resource thus fulfill the social interest.