No Free Lunch: Economics for a Fallen World: Third Edition, Revised

Chapter Five: Supply & Demand: Markets at Work 106 DESIRED LEARNING OBJECTIVES At the conclusion of this chapter, the student should be able to... § § Describe how markets are simply many individuals engaged in what Adam Smith called the propensity to “truck, barter, and exchange” § § Show that buyers compete against buyers, and sellers compete against sellers § § Describe how markets convey information (through prices and profits/losses) to enable market participants to behave in socially beneficial ways § § Explain how government policy can distort or impede the market’s coordinating function § § Recall that supply and demand curves are a conceptual, not empirical (data derived) analytical tool § § Relate how market processes respond to disequilibrium prices (either shortages or surpluses)