Macoreconomics_ Chapter 3 Assessment.pdf - Question 3.1 a Adam Smith is was a famous economist who is known for developing the concept of the invisible

Macoreconomics_ Chapter 3 Assessment.pdf - Question 3.1 a...

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Question 3.1 a. Adam Smith is was a famous economist who is known for developing the concept of the invisible hand in supply and demand. Frederic Bastiat was a French economist that was known for observing how the economy functioned, and how demand and supply played a role in the everyday life. Milton Friedman was an American economist that was famous for studying the concept of consumption. b. All of the three excerpts explain how demand and supply work together in a free market system in order to provide consumers will the things that they need/desire. All of these excerpts/video discuss how everyone has something that they desire (goods/services/money, etc.), and are willing to trade something in return for it. This is how the free market works. Someone is willing to produce something that someone else desires in return expecting that that person will compensate them for their work by providing them with what they desire. Both sides are obtaining the things that they desire through this trade system known as the free market, where supply and demand work hand-in-hand and those who participate in these transactions have willingly chose to do so. c. The video is the excerpt that has best encapsulated my view of how markets functions because Milton Friedman explained how people voluntarily join the market because they feel that someone wants the thing that they are providing, or because someone desires something that another person has. He explained how a bunch of different transactions take place to produce pencils because someone, somewhere desires those pencils. To me, this is how the market works. People desire something, and other people are willing to supply them with it. In return, those people get compensated for their work, and this process continues on and on as the economy grows d. My most memorable take away was from the first excerpt from Adam Smith. The concept of the invisible hand is interesting to me because it demonstrates how supply and demand rely on each other. Suppliers provide the goods and services that consumers
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