Lecture #20 "Trade and Exchange" (10/19/2011)

Ethics in Economics.... 

Feedback loops: Can be considered as a channel or a pathway formed by an 'effect' returning to its 'cause'.
What allow people to have faith in the system.
Ex. How can I trust a business to do something for me like deliver a package if I don't know anybody in the company or in the process.

• Active loops is what makes many parts of our life great.
• Inactive loops are in our frustrating pieces of life like school tuition or healthcare insurance. 

Trade and Exchange

Core Economic Questions (3):

1. What goods to produce?
2. How to produce those goods?
3. How to deliver those goods to the producers?

Inputs----->Black Box----->Stuff


Inputs are called the "Factors of Production"

• Land (Natural Resources)
• Labor
• Capital (What is produces with the objective of then producing more)
• Human Capital (machines, any machinery)
• Physical Capital (any improved quality to make stuff)

Ways of achieving this process:

• Become self sufficient
• Specialization and Exchange 
• Discovering

-Rizzo

Daniel Gaona