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BARTER: A method of trading goods, commodities, or services, directly for one another without the use of money. In a barter exchange one good is traded directly for another. This sort of exchange ultimately requires a double coincidence of wants, meaning that each trader has what the other trader wants and wants what the other has. Without a double coincidence of wants the exchange process can become exceedingly complex, requiring a great deal of resources to complete transactions, resources that can not be used for production. In fact, inefficient barter trading was the primary reason that money was invented. With money, more resources can be used for production and fewer are needed for trading.
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Lesson Contents
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Unit 1: Getting Started |
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Unit 2: The Schedule |
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Unit 3: The Curve |
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Unit 4: Analysis |
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Unit 5: Investment | |
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Production Possibilities
In this lesson we'll take a trip through production possibilities. Production possibilities is a handy little analysis that lets us consider what the economy is capable of doing, production-wise. We'll see have a production possibilities curve, the cornerstone of this analysis, is derived and how it can be used to understand several important concepts, including opportunity cost, unemployment, investment, and economic growth. - The first unit begins this lesson by laying the foundations for production possibilities analysis, especially assumptions and limitations.
- We turn out attention in the second unit to the production possibilities schedule, a simple table that gives us a first shot on this analysis.
- The production possibilities curve is then derived from the production possibilities schedule in the third unit, with particular emphasis on the importance of opportunity cost
- In the fourth unit, we make use of the production possibilities analysis for an understanding of three important concepts: full employment, unemployment, and economic growth.
- And lastly, the fifth unit uses production possibilities to analyze investment in capital goods as a means of achieving economic growth.
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TAX WEDGE The difference between demand price and supply price that is created when a tax is imposed on a market. Placing a tax on a market disrupts what otherwise would be an equilibrium equality between demand price and supply price. A tax wedge results because the tax is included in the demand price paid by buyers but not in the supply price received by sellers. With standard demand (negative slope) and supply (positive slope) curves, the incidence of the tax (who pays) is divided between buyers and sellers.
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PURPLE SMARPHIN
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Today, you are likely to spend a great deal of time going from convenience store to convenience store looking to buy either a birthday gift for your grandmother or a T-shirt commemorating yesterday. Be on the lookout for telephone calls from former employers.
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A communal society, a prime component of Karl Marx's communist philosophy, was advocated by the Greek philosophy Plato.
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"You have to find something that you love enough to be able to take risks, jump over the hurdles and break through the brick walls that are always going to be placed in front of you. If you don't have that kind of feeling for what it is you're doing, you'll stop at the first giant hurdle. " -- George Lucas
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