Microeconomics Where do markets come from?. Microeconomics Study of economic decisions and behavior...
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Transcript of Microeconomics Where do markets come from?. Microeconomics Study of economic decisions and behavior...
![Page 1: Microeconomics Where do markets come from?. Microeconomics Study of economic decisions and behavior of small units like people, families, businesses.](https://reader035.fdocuments.in/reader035/viewer/2022071718/56649e955503460f94b99316/html5/thumbnails/1.jpg)
Microeconomics
Where do markets come from?
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Microeconomics
• Study of economic decisions and behavior of small units like people , families, businesses.
• How the interactions of buyers (consumers) and sellers (producers) in markets affects price.
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Before there was markets.
• People made what they needed for themselves
• They were not affected by other people’s choices
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Division of Labor
• The division of a complex procedure into small tasks, enabling workers to increase output through specialization.
• Which leads to more output than the producers themselves wish to consume
• They will want to trade their surplus
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exchange
• Producers exchange for goods and services that they can not produce and are produced someplace else.
• Which leads to reduction in self-sufficiency
• Establishes markets
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interdependence
• Decisions and events in one part of the world or a sector in an economy affect decisions in other parts of the world or other sectors in an economy.
• Loss of self-sufficiency makes us dependent on others and others on us
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• The division of labor starts markets because people need to trade for what they do not make
• Exchange makes them continue because people exchange their labor for money which they use to exchange for the goods and services that they continue to need
• Interdependence is the result because we are in the system of division of labor and exchange we are dependent upon other people and they are dependent on us.
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Read “I, Pencil My Family Tree as told to Leonard E. Read.
Write a five-paragraph essay responding to the following question. How does Leonard E. Read’s essay “I, Pencil My Family Tree” illustrate the working of
the free market? In Class Plan
Day One: Read Essay, take notes
Day Two: Rough draft
Day Three: Peer editing, and final draft
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Nobel Prize Winner Milton Friedman Talks about the free markets