The Role Of Money
Many economies in the distant past functioned without money. People simply bartered their products and labor with one another. But these have usually been small, uncomplicated economies, with relatively few things to trade, because most people provided themselves with food, shelter and clothing, while trading with others for a limited range of amenities or luxuries. Barter is awkward. If you produce chairs and want some apples, you certainly are not likely to trade one chair for one apple, and...
Money and the Banking System
Any commodity to be called money must be generally acceptable in exchange, and any commodity generally acceptable in exchange should be called money. -IRVING FISCHER Everyone seems to want money, but there have been particular times in particular countries when no one wanted money, because they considered it worthless. In reality, it was the fact that no one would accept money that made it worthless. When you can't buy anything with money, it becomes just useless pieces of paper or useless...
Part Iii Work And Pay 1
1. What have been some of the economic and social consequences of the substitution of machine power for human strength, as a result of industrialization, and the growing importance of knowledge, skills, and experience in a high-tech economy 2. Would you expect the average hammer to drive more nails per year in a richer country or a poorer country Would you expect the average worker to produce more output per hour in a richer country or a poorer country Explain the reasons in each case. 3. Some...
Part Ii Industry And Commerce
1. What are some of the reasons why some of the biggest and most profitable businesses have declined into obscurity or even bankruptcy 2. How and why can Toyota manufacture cars with only enough inventory of parts to last an hour, while Soviet industries had nearly enough inventory to last for a year 3. In some industries, the four or five top firms may make the great majority of the sales in the whole industry. Moreover, that may be true for decades on end. Does this then mean that there is a...
Incremental Substitution
Because economic resources are not only scarce but have alternative uses, the efficient use of these resources requires both consumers and producers to make trade-offs and substitutions. Prices provide the incentives for doing so. When the price of oranges goes up, some consumers switch to tangerines. When bacon becomes more expensive, some consumers switch to ham. When the cost of a vacation at the beach rises, some people decide to go on a cruise instead. Note that what is happening here is...