Markets can be an efficient and effective way to allocate (distribute) "private goods" much of the
o This is true, unless there is Market Failure.
o "Markets work well, except when they don't."
Pre-requisites to Markets Working
o Property rights mu
Rule of 72's
The 'Rule of 72' is a simplified way to determine how long an investment will take
to double, given a fixed annual rate of interest. By dividing 72 by the annual rate of
return, investors can get a rough estimate of how many years it will tak
Supply & Demand
Price changes due to supply and demand.
A huge recession caused the demand to drop for several goods, such as gasoline. As a result, the price
dropped as well.
The Law of Demand: Negative / Inverse relationship between prices and quantity
Go over econ review and prepare two essays.
Because of the nature of Public Goods, they have Positive and Negative Externalities and attract
freeloaders, making it unlikely for a private party to maintain one (no profit).
Negative Externalities - A third