What is the purpose of the price system? Why is trade crucial to an economy? Learn all about how the price system helps to coordinate global economic activity.
First, learn about how a price is a signal wrapped up in a signal and how we should approach limited resources. Furthermore, learn how speculation and futures effect the price of goods, such as orange juice and gasoline. Then, explore price ceilings and price floors. Learn how price controls create shortages, as well as other unintended sequences.
Lastly, learn how specialization and division of knowledge relates to trade. Learn about the typical arguments against trade and how these arguments can be refuted.
This course will be ideal for students studying economics, as a resource for teachers, or for anyone who wants to gain a better understanding of how the economy works.
PREREQUISITE: Microeconomics: Supply, Demand, and Equilibrium;
This course is the second in a series of four courses on Microeconomics.
After completing this course, you will be able to:
- Explain the price system and define prices.
- Discuss how markets link people and places.
- Define speculation, futures, and predictions markets.
- Explain how prediction markets can help businesses, governments, and scientists.
- Define a price ceiling and a price floor.
- Explain the unintended consequences of price ceilings.
- Explain why governments enact price controls and discuss how price controls relate to communism.
- Discuss the benefits of trade and define protectionism, tariffs, and quotas.
- Explain the common arguments against international trade.
All Alison courses are free to study. To successfully complete a course you must score 80% or higher in each course assessments. Upon successful completion of a course, you can choose to make your achievement formal by purchasing an official Alison Diploma, Certificate or PDF.
Having an official Alison document is a great way to celebrate and share your success. It is:
- Ideal to include with CVs, job applications and portfolios
- A way to show your ability to learn and achieve high results