GOV 312L Lecture Notes - Lecture 21: Autarky, General Agreement On Tariffs And Trade, World Trade Organization
Document Summary
Decentralized institutional areas in which individuals, firms, and states meet to exchange products and services. All parties benefit from exchange because each receives something valued more than what was surrendered. Individuals or firms may acquire something that they do not possess for something else held in abundance. In perfect competitive markets, high quantities of buyers and sellers render any one actor incapable of setting the terms of any exchange. Ex: gasoline markets in capitalist economies are competitive. When you need to fill up your gas tank, you cannot tell the attendant that you will pay one dollar less per gallon than the advertised price and expect him to comply. In noncompetitive markets, the choice of potential suppliers or consumers is limited. Constraints on competition can grant one side more power to set the terms of any transaction. The organization of petroleum exporting countries (opec) controls approximately 75% of the known oil reserves in the world.