Homework Help: Mirco economics

Posted by D on Saturday, November 4, 2006 at 9:36am.

Why does trade of any type take place? Illustrate your answer by reference to each of the following:
1.
Market exchange in which price is determined by Demand and supply. (refer in your answer to producer and consumer surplus)
2.
Exchange between two individuals based on differences in tastes given a fixed endowment of two goods.
3.
International trade

Take a shot, why would trade take place. Hint: under trade, both sides are better off.

what does fixed endowment of two goods mean ? that means i have 5 apples and someone else has 5 oranges. but we both cannot buy any additional apples or oranges? and the last option we have is to trade due to difference in taste??

i am abit confused about part 2.

Mirco economics - Martin, Saturday, March 29, 2008 at 12:05am
Endownment in economics is the value one places on a certain object...

so in this case, i think fixed endowment just means u wud value the oranges as much as the apples

Answer this Question

Related Questions

Economics - Hi again! This is a question alot of people will be interested in ...
Economics(micro) - hey, could someone please give me some tips for the following...
Economics M/C - Hi, I am having difficulty determining the answer for the ...
Social Studies - Could you please check the definition that matches with the ...
economics - im learning about economics and the meaning of 3 economic systems ...
Economics - Consider the following two country-two goods world, with a single ...
Economics - How do you proceed in calculating exchange rates between countries ...
Economics - A. Domestic trade 1.) how does marketing affect local trade? 2.) why...
Economics M/C - The market in which the assumption of continuous market clearing...
BUSINESS - You have been asked to evaluate the country you selected as a ...

For Further Reading

First Name:
School Subject:
Answer: