Sunday, November 27, 2011

Equilibrium and The Price System 11/21

1. Money reduces exchange/transaction costs and helps facilitate trade by encompassing the value of goods
2. Surplus - At that price, quantity supplied is higher than quantity demanded
3. Shortage - At that price, quantity demanded is higher than quantity supplied
4. Double-Coincidence of Wants - Have to find someone with good you want who is willing to trade for what you have

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