Review Notes - The Market

- Specialization and Exchange

- advantages of specialization of labor

- why do we have exchange? under what conditions?

- systems of exchange

- Definitions

- the market?

- an economy?

- Actors in the Market

- households

- firms

- government

- what do each of the actors in the market do? What assumptions are made about their behavior?

- interrelationships

- circular flow model of an economy

- what are factor markets?

- what are goods and services markets?

- who owns factors of production?

- etc.