Unit 7: Prices and Market Order
With the fundamental economic acts explicated in the previous units, this unit explains how they come together to constitute the market order. As each individual acts based on their preferences and possibilities, they influence the supply and demand of all economic goods, leading to the emergence of complex markets and prices.
Completing this unit should take you approximately 3 hours.
- Upon successful completion of this unit, you will be able to:
- Describe the process of barter pricing, what problems arise from it, and how money is the solution to this problem.
- Explain how value scale can be used to compare goods.
- Understand how supply and demand curves are derived from value scales.
- Explain how prices are differentiated in the market using the concepts of factors of production, discounted marginal value product, and equilibrium prices.
- Understand the role of self-interest in the service of others.
- Explore different ways open and free markets allow for channeling human competition productively for the benefit of all.
7.1: The Market System Lecture
- To understand the logic of the market order, consider how a barter economy would work. Think of how many prices would be needed to express goods in terms of one another, and how much this would limit specialization. When all goods have prices denominated in one form of money, it becomes very easy to compare them and the utility we get from them. Watch this video to learn how individual preferences translate to supply and demand curves, and how to apply this analysis to economic production. Topics covered include: Barter Pricing • Money is the solution to this problem • Value Scale • Supply & Demand curves • Equilibrium Price • How prices are determined • Prices of factors of production • Discounted Marginal Value Product • Inequality & Cooperation and Competition
7.2: The Market System Discussion
- Since you have watched the video lecture for unit 7, it's time to watch Dr. Saifedean moderate a discussion on the unit's theme by addressing questions asked by your fellow classmates. As you watch the discussion unfold, take notes to help you retain information. Make sure you watch the entire discussion seminar video, otherwise you may skip over important points. To get the best learning experience and mastery of the major concepts covered in this unit, you'll want to watch all videos in their entirety,
7.3: The Market System Review
This resource contains a summary of some of the key concepts discussed in unit 7. Don't skip ahead - the information on this page is easier to understand if you have watched the video lecture and discussion seminar video in their entirety. Bookmark this resource to keep it handy during studying.