SOCB42H3 Lecture : Lecture 3

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Propensity to trade markets sol skilled labour national wealth commercial. Propensity to better condition saving capital accumulation higher proportion of productive workers national wealth commercial society. Why does money exist: limits of barter, bartering is very restricted. each party must have something the other wants: money is whatever everybody wants (could be anything, e. g. salt, cows, etc. ) What good substitution to serve as money: a) lasts (non-perishable, use value vs. exchange, divisible, use value: whatever you do with it for personal use, exchange value: use to get something else (trade) Natural price: however much it costs to bring something to the market to sell (wages, rents, normal profit) Market price: however much you actually sell something for. Law of demand: there is an inverse relationship b/w the price of a good and amount of buyers willing to purchase (the higher the price, the less willing one is to purchase)

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