Markets Link Geographically

… a core concept in Economic Analysis and Atlas102

Click for MRU video

Click for MRU video

Concept description

Alex Tabarrok (reference below, video on right), describes the way markets coordinate the self-interests of people in different geographic locations.

The video looks at production and consumption markets and the role that prices play in it all. Tabarrok asks where the iPhone is made and answers: It’s a “world phone” produced by thousands of people all over the world, working in cooperation in order to make one product that many can enjoy.

Tabarrok notes, as illustrated in the practice questions below, that a change in supply of one commodity will produce changes in demand and supply (and thus changes in price) for many other commodities.

Practice questions

From http://www.mruniversity.com/node/192283, accessed 1 May 2016.

  1. Suppose you learned that growing political instability in Chile (the largest producer of copper) will greatly reduce the productivity of its mines in two years. Ignoring all other factors, which curve (demand or supply) will shift which way in the market for copper two years from now?

Atlas topic, subject, and course

The Price System and Price Regulation (core topic) in Economic Analysis and Atlas102 Economic Analysis.

Source

Alex Tabarrok, Markets Link the World (5-minute video), Principles of Economics – Microeconomics, Marginal Revolution University, at http://www.mruniversity.com/courses/principles-economics-microeconomics/markets-invisible-hand-supply-chain, accessed 1 May 2016.

Page created by: Ian Clark, last modified 1 May 2016.

Image: Alex Tabarrok, minute 1:14 of Markets Link the World (5-minute video), Principles of Economics – Microeconomics, Marginal Revolution University, at http://www.mruniversity.com/courses/principles-economics-microeconomics/markets-invisible-hand-supply-chain, accessed 1 May 2016.