Interaction: How Economies Work Interaction of choices—my choices affect your choices, and vice versa—is a feature of most economic situations. The result of this interaction are often quite different from what the individuals intend. There Are Gains from TradeTrade- providing goods and services to others and receiving goods and services in returnGains from trade- people can get more of what they want through trade than they could if they tried to be self-sufficient Specialization- each person specializes in the task that he or she is good at performingThe economy, as a whole, can produce more when each person specializes in a task and trades with others Markets Move Toward EquilibriumEquilibrium- when no individual would be better off doing something different
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