CPO 2001 Lecture Notes - Lecture 8: Planned Economy, Mercantilism, Absolute Advantage
28 Feb 2018
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Document Summary
Market: an opportunity to buy, sell, trade for goods and services, they think about the economy in abstraction of reality. Complete knowledge of prices, strategies, and perspectives, producing at full capacity. An exchange for products between suppliers and buyers, abstract concepts. A place where prices are set in a spontaneous way through a decentralized exchange. Represent the changing demand of a supply of a good. The ownership of goods and services exchanged in markets; moves on markets. Goods generally provided by the state that are available to everyone, you cannot own them because it"s a shared good. It"s hard to create a market for public goods because it"s dicentives. Free rider problem; good o ered where people latch on to it and reap the bene ts without doing anything in return. Looks di erent in di erent countries where a good can be considered private.
