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Exploring Trade and Economy: Bartering to Modern Economics

Dive into the world of trade and economy to understand the evolution from bartering to modern economic systems. Learn about the concepts of needs vs. wants, opportunity cost, different economic models, and the impact of trade on civilizations.

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Exploring Trade and Economy: Bartering to Modern Economics

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  1. Trade and economy

  2. Learning Objectives • Differences between bartering and trade. • Differences between needs and wants. • What is opportunity cost? • Differences between command and free market economy.

  3. Bartering • Barter: the direct exchange of goods/services without money.

  4. Why did People Barter? • To get what they need • Not able to grow or raise everything they need • Some people are better @ a task than others • Specialization: focusing on a specific task that an individual or company does best. • Tinsmith – farmer • Farmer – rancher • Are there problems with bartering?

  5. Problems with Bartering • Value of items are not standardized • Need someone to barter with • Growing seasons • Spoilage

  6. Trade • Trade: the exchange of goods, services, and money.

  7. Money • Cowrie Shells (China/South Africa) • Metal coins • Paper money • Representative money (backed by gold or silver reserves) • Fiat money (not backed by reserves)

  8. Economics

  9. Wants and Needs • Wants: goods/services that are not necessary but you desire or wish for. • Needs: goods/services that are required to survive such as food, clothing, shelter.

  10. Goods and Services • Goods: items that are bought/traded that you can feel…items that are tangible. • Service: any kind of work performed by others.

  11. Supply and Demand • Supply: how much of an item is available. • Demand: the desire to purchase a particular good or service. • Both supply and demand determine price.

  12. Opportunity Cost • Opportunity Cost: process of choosing one good or service over another. What you must give up to get something?

  13. Global Economy • Economy: activities related to the making, buying, and selling of goods or services. • Interdependence: when people depend on one another for goods and services. • Result of specialization.

  14. Types of Economy • Command-government controls all aspects • i.e. wages, working conditions, jobs for people, allocation of resources • Socialism-Europe, Communism • Free Market-individuals decide jobs, allocation of resources, products-U.S. • Private property a must • Freedom of competition • Unequal social classes • Democratic types of government

  15. Trade and Economy Impacts Civilizations • Rise of merchant class. • Who are merchants today? • Civilizations made money to support themselves. • How did they do this? • Civilization currency being used. • Led to exchange rates. • Exchanging of ideas. • Technological innovations-goods, protection.

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