Class Notes (1,200,000)
CA (650,000)
UTSC (30,000)
Sociology (2,000)
SOCB42H3 (200)


Course Code
Dan Silver

This preview shows pages 1-2. to view the full 7 pages of the document.
Lecture 3: Market Processes
Tuesday September 28 th, 2010
Sat Nov 6. 9 - 11 am BV340, BV355,BV363
Identification process-identify what author wrote it
Definitions-key concepts, explain the concept
Short essay questions
Commercial society: a society in which the division of labour is highly developed
Large amounts of capital have been accumulated
This is really our society (look around)
Every man thus lives by exchanging, or becomes in some measure a merchant, and the
society itself grows to be what is properly a commercial society (pg. 33)
In a commercial society we are all merchants making trades all the time
*What are the conditions that make the constant trading and exchanging work?
Money: facilitates trade and exchange
What are the Rules: of trading and exchange
Money and Markets:
Why does money exist?
It makes trading work better/facilitates exchange
Limits of bargain: not a very efficient way to do exchange
The only way we can make trade is by barter
Ex. I have a bunch of cows and you have pigs, and I want pigs but you dont want cows
then there is no way we can make it work with an easy exchange
If that’s the situation were not going to get markets developing, it will only be exchange
In terms of Barter- you always have to find people who want what you are willing to give
Money: is anything everybody will accept in a trade
An abstract quality that anybody will accept
Historically different things have served as money salt, cigarettes, cows
What qualities make money work well?
Lasts: good for it to last
Divisible: (can be divided) if we look from culture to culture (metal serves the function of
money very well) paper money does this as well
a very functional way to distribute money is with money
*money is the basic principal that makes exchange possible in every society
Use value & Exchange value: pg. 41
Use value: the value in use

Only pages 1-2 are available for preview. Some parts have been intentionally blurred.

The value you get after using something
Ex. if he has 20 cows, the use value that he has with the cows is that he can walk the fields
with the cows, have a nice picnic with them, maybe he could milk them, or make a
hamburger out of them
Exchange value: the value you get from trading the cows with something else
The exchange value is the value you get out of exchanging something
For this, the use doesnt really matter
This is the introduction of money
The things in our life tend to take on a split quality- either a use value or an exchange value
Everything that we do has a use value like your education
You can treat your friends this way (are they going to be useful to me to get a job?
Smith: creates the possibility that this use value and market value work
How is it that products get distributed to people?
This is very important especially in a commercial society
When we make things such as an iPod- how does this get distributed around the world
Natural Price: however much it costs to actually bring it to the market to sell
Includes the wages rents, included the profit that the worker keeps
Smith believed that this is determined by labour
Market Price: however much it actually sells for (very often it various)
It varies a lot, when the difference happens people tend to adjust their behaviour in a way
that brings the natural price and the market price closer together
Two Fundamental Laws:
Law of Supply: there is a direct relationship between the price of a good and the amount of
it that the supplier offers for sale (the higher the price the more willing a seller is more likely
to be to sell their product)
Law of demand: there is an inverse relationship between the price of a good and the
amount of it with the buyers that are willing to purchase it (prices and consumers)
*there are these simple laws that regulate producers and consumers
Effective Demand: demand means all the things in the world you want to have
Effective demand: how one person can effectively actually purchase something with their
*if demand is higher than supply > the market price is going to go up
You're Reading a Preview

Unlock to view full version