ECON 219 Lecture Notes - Mixed Economy, Planned Economy, Resource Allocation

• School: McGill University
• Department: Economics (Arts)
• Course: ECON 219
• Professor: Christopher Ragan

Document Summary

Different types of economies (mixes of free markets, tradition and government intervention) Self interest, not benevolence, is the foundation of economic order. In transactions, both sides (the buyer and the vendor) profit. Efficiency refers to organizing available resources to produce the goods and services that people most value, when they most want them, and by using he fewest possible resources to do so. Prices and quantities are set in (relatively) free markets in which individuals trade voluntarily. Institutions, created by the state, protect private property and enforce contractual obligations. One has 60 million sheep and 3 million people, the other has 190 million people and 3 sheep. In japan, because humans result in higher demand for land. So scarcity is about how many we have relative to how many we want. Prices typically reflect scarcity (high prices usually means either there is a small supply or high demand).