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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 7: Market Equilibrium | Unit 4: Adjustment
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Page: 13 of 22
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Markets have a built-in self correction mechanism:- If a market is at equilibrium, it remains there.
- If a market is not at equilibrium, it moves to equilibrium.
- A market does not need someone (like government) controlling it to ensure that it reaches equilibrium.
Three price alternatives:- At equilibrium, nothing changes.
- Below equilibrium, a shortage.
- Above equilibrium, a surplus.
- By creating shortages and surpluses, non-equilibrium prices induce the price to change. These changing prices move the market back to equilibrium.
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VALUE The worth members of society place on a good, service, resource, commodity, or other asset, which is based on the direct or indirect satisfaction of wants and needs generated. In an economy that uses markets to exchange commodities, value is commonly indicated by price and measured by the economy's monetary unit.
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BROWN PRAGMATOX
[What's This?]
Today, you are likely to spend a great deal of time at a going out of business sale looking to buy either a large, stuffed giraffe or a birthday greeting card for your aunt. Be on the lookout for strangers with large satchels of used undergarments.
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This isn't me! What am I?
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Cyrus McCormick not only invented the reaper for harvesting grain, he also invented the installment payment for selling his reaper.
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"We succeed in enterprises (that) demand the positive qualities we possess, but we excel in those (that) can also make use of our defects." -- Alexis de Tocqueville, Statesman
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PIT
Personal Income Tax
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