GEOG 216 Lecture Notes - Lecture 25: New York Mercantile Exchange, Dalian Commodity Exchange, Chicago Mercantile Exchange
23 Nov 2017
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Document Summary
Geography of the world economy november 30th. Valuation of nature a price is set for units of a given natural material through market exchange (laws of supply and demand) These markets will be local and global different scales where we see natural. Eg for local a farmer"s market (cid:523)atwater(cid:524). Eg for local cattle auctions commodities being negotiated. Key global commodity exchanges price for natural commodities. Trading activities at exchanges can be for immediate purchases (called spot/cash trades) or for futures (for future deliveries at guaranteed price classic example is that airlines purchase fuel through futures) Commodity exchanges are thought to be very efficient at setting prices. There will emerge some sort of equilibrium price for each commodity. Because of this, prices will be able to adjust very rapidly for changes in supply or demand. Yet, they do not account for broader environmental impacts of extracting and using a resource. This means that environmental costs are left out.
