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What is the market?
A market is a place or platform where buyers and sellers interact to exchange goods, services, or resources.
Who is Adam Smith and what can you tell about him?
Adam Smith (1723-1790) was a Scottish economist known as the “father of modern economics.” He wrote The Wealth of Nations and introduced the concept of the “invisible hand.”
Is a completely free-market economy an ideal or a reality?
It is an ideal; in reality, all economies have some form of government intervention.
The role of competition.
Competition drives efficiency, innovation, and fair pricing.
Every night I’m told what to do, and each morning I do what i’m told. But I still don’t escape your scold.
An alarm clock
What are the main market participants?
Consumers, producers (businesses), government, and intermediaries (e.g., wholesalers, retailers).
Who are classical and neoclassical economists?
Classical economists (e.g., Adam Smith, David Ricardo) focus on free markets and self-regulation.
Neoclassical economists emphasize individual choices, supply and demand, and utility maximization.
Difference between a capitalist and a socialist economy?
Capitalist economy: Private ownership and market-based allocation.
Socialist economy: Public ownership and state-driven allocation.
Why do buyers and sellers make exchanges?
To satisfy needs and wants (buyers) and generate profits (sellers).
What is at the end of a rainbow?
The letter «W»
How do the main market participants behave in the market?
Consumers seek to maximize utility (satisfaction).
Producers aim to maximize profits.
Governments regulate and stabilize the market.
Intermediaries facilitate exchanges.
What is the traditional economy?
An economy based on customs, traditions, and bartering, often found in rural or undeveloped areas.
What are the main questions of the economy?
What to produce?
How to produce?
For whom to produce?
Do barter exchanges differ from money exchanges?
Yes, barter involves direct goods/services trade, while money facilitates easier and more efficient exchanges.
What do you throw out when you want to use it, but take in when you don’t want to use it?
anchor
What are microeconomics and macroeconomics?
Microeconomics studies individual and business-level decisions.
Macroeconomics studies the economy as a whole (e.g., inflation, GDP, unemployment).
What is the market economy?
An economy where supply and demand determine prices and resource allocation, with minimal government intervention.
Market structure, what does it mean?
The organization of a market based on the number of firms and competition level (e.g., perfect competition, monopoly).
Main aspects of demand.
Demand depends on price, income, preferences, and substitute goods.
What two things can you never eat for breakfast?
Dinner and supper
What are positive and normative economics?
Positive economics describes facts and cause-effect relationships.
Normative economics involves value judgments and opinions.
How would you define “free market”?
A system where prices and production are determined by unrestricted competition between privately-owned businesses.
Scarcity and its influence on economic questions.
Scarcity forces societies to decide how to allocate limited resources effectively to meet unlimited wants.
Equilibrium and the way you understand it.
Equilibrium is the market state where supply equals demand, leading to stable prices.
Do you know why birds fly to south in the winter?
Because it's too far to walk there.