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Unformatted text preview: does plan to consume or use or for an item that s/he plans to trade away. Eventually, s/he will exchange an item s/he has obtained in trade for a good or service s/he plans to consume or use. (Russell) V. A basic question a. Why are direct exchanges so rare? VI.Exchange, money, and banking a. Production and exchange i. Robinson Crusoe economy 1. (autarky) ii. Autarky 1. An economic system in which people do not interact with each other. Economically, so that no one consumes anything s/he did not produce and no one produces anything s/he does not consume b. Inefficient i. It would be possible to produce more output without using anymore input ii. Production is inefficient if it is possible to increase the quantity of output without increasing the quantity of any input, or if it is possible to reduce the quantity of any input without reducing the quantity of output. c. Methods for improving efficiency of production i. Specialization (division of labor)...
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- Winter '09
- Economics, service s/he, I. Deferred payments