Econ 101 - Lecture 4 30/01/2008 09:08:00 Last time: What's...

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Unformatted text preview: Lecture 4 30/01/2008 09:08:00 Last time: What's needed to run a "Specialized" economy? With specialization production (ppl find out what they are good at and then specialize in it) Institutions (govt.planned/markets) o Cant have anarchy and chaos example is Baghdad we caused terrorist and anarchy cant have a smooth working economy without law and order. Antitrust laws describes how businesses can organize and compete. Economic Mechanisms F A P X M X D ? X Democracy allows us to make mistakes but society can eventually throw leaders out of office. In the market society if you make a mistake you get thrown out of the economy Infrastructure Political Economy (the interface) Prerequisites for voluntary exchange Inherent attributes of goods & services ("public'" vs. "private") Govt. Essentials for markets to work Services allow a planned economy to work: How much we spend on health care and education o both services meant to enhance ones life. Make you more educated and alive Private Nonjoint Rival Asymmetric Excludable Public Jointly Consumed Nonrival Symmetric Nonexcludable Note: How do these attributes relates to the notion of "ownership"? Question of the week: Wheat rice and/or potatoes are essential for survival in most parts of the world, yet in industrialized societies they are extremely inexpensive whereas baubles made out of gold and silver that are trivial in terms of supporting human existence are very expensive. Explain why? Shawls Kiwis 30/01/2008 09:08:00 30/01/2008 09:08:00 ...
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Econ 101 - Lecture 4 30/01/2008 09:08:00 Last time: What's...

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