When the Soviet Union, which had been a command economy, broke apart, an official of the new Russian government called an official of the American government and asked" "Who is in charge of bread distribution?"
It took a few minutes for the American official to fully understand the question. But when he did, he answered: "No one."
The Russian could not understand that. How can wheat be grown, ground into flour, baked into bread and distributed to stores without the government telling everyone what to do?
Use your knowledge of supply and demand, the Invisible Hand (the price system) and free markets to explain to the Russian official how this process works. You don't have to do it all in one post. Instead you may wish to discuss one market at a time or, perhaps, explain the Invisible Hand and the Price System in one of your posts.
This is a true story. The Russian government really did call America and ask how to distribute bread in a free market system. How that is done is so normal for us, that we probably don't even think about it. But now is a good time to think about it and obtain a better understanding of free markets, the Invisible Hand, the Price System and supply and demand.
• Include a word count on each post.
• Each post submitted should be 250 words. Keep them short, specific, and clear.
• Use paragraphs as appropriate.
• Very lengthy posts do not provide an incentive to read.
• Remember to document all use of sources by using citations and references. These should be in APA format.
• Please review Plagiarism Powerpoints.
VIDEOS
https://www.youtube.com/watch?v=ulyVXa-u4wE
https://www.youtube.com/watch?v=4ERbC7JyCfU
Assignment Summary:
1) Review the Supply and Demand Guide and the Supply and Demand PowerPoints before you start your posts.
2) Watch the videos above.
3) Review Chapter 4 in the textbook.
4) Then consider the multiple steps (markets) involved in producing and distributing the loaves of bread that you find in your local supermarket. Explain to the Russian official how the free market accomplishes this rather impressive task.
Since multiple markets are involved, you probably will want to examine different markets in different posts.
Remember to refer to the appropriate graph(s) in the Supply and Demand Guide as you examine the various markets involved. If you wish to draw an appropriate graph and attach it to your post you may, but that is not required. (If you do, be sure to explain the graph in your post - but don't attach your post, just the graph).