SECTION I OUTLINE

SECTION I OUTLINE - I. SECTION I EXCHANGE a. Prices i....

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I. SECTION I – EXCHANGE a. Prices i. Money prices express the rate at which one good can be exchanged for another ii. Barter – “The direct trade of one good for another” never transpires in developed economies 1. This is because in order for trade to occur, a double coincidence of wants must exist in which each party must want what the other has to offer iii. Everything forgone in making a trade represents a cost iv. Costs which are not received as a benefit to the trading partner are transaction costs b. Middlemen i. Middlemen are specialists in reducing transactions costs so that trade can transpire ii. Middlemen can survive in a market if and only if trading with middlemen is less costly than trading without them. c. Specialization i. Most workers specialize because specialization increases their productivity d. Cooperation i. Buyers and sellers trade with each other in an attempt to make themselves better off, and as a result, trade is mutually advantageous e.
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SECTION I OUTLINE - I. SECTION I EXCHANGE a. Prices i....

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