Note: The video has Closed Captioning. To activate it, start the video, mouse over the bottom of the video and click on the CC icon, then select from the menu
Note: The video has Closed Captioning. To activate it, start the video, mouse over the bottom of the video and click on the CC icon, then select from the menu.
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 askedâ€ â€œWho is in charge of bread distribution?â€
It took a few minutes for the American official to fully understand the question. But when he did, he answered: â€œNo one.â€
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 can use multiple posts and discuss and illustrate each step of the supply chain. Or you may focus on the consumer-retailer-baker part of the supply chain. Either way be clear and specific about how the changes in demand lead to changes in supply at each stage.
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 donâ€™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.
- Review the Supply and Demand Guide Supply and Demand Guide – Alternative Formats and the Supply and Demand PowerPoints Supply and Demand PowerPoints – Alternative Formats before you start.
- Watch the video(s) above
- Review Chapter 4 in the textbook
- 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.
Remember to refer to the appropriate graph(s) in the Supply and Demand Guide as you examine the various markets involved.
Post on three different days for a minimum of three posts. Failure to meet these minimum posting requirements results in point loss.
- Include a word count on each post. All of your posts should sum to a minimum of 500 words.
- Each post submitted should be between 150 and 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 APA format – Alternative Formats .