Some theory

Positive statement: how allocation of goods and services are actually determined, suggest other uses of economics, how distinct changes in laws and rules, other government intervention in the markets.



Normative statement :combine with positive statement, predicting the effects of change in rules, value judgment.



Equilibrium: the pressure for higher prices is exactly balanced by a pressure for lower prices, thus the current state of exchange between consumers and suppliers can be expected to persist.

( why balance of payment to called balance, i think it may because it need to persist?)

The equilibrium of demand and supply maximize the total gains from trade.