Hello everybody my name is Alex Merced and this is going to be the first in many economic discussion that I will be doing. The purpose of this economic discussions is to help give people a better understanding of economics and the current economic landscape and hence evaluate the changing economic landscape. We will set off at the beginning with supply and demand. Essentially in all economics at the bottom line there are two forces supply and demand. You have supply which is the amount of resources available and demand the amount of need or want of those resources. So if these two forces are ever to dictate prices and value. So essentially let's say I have five iPods but if there are a million people that want iPods, those five iPods will be very valuable. But if there are a million iPods and only five people that want them, they will be very not quite so valuable. So it is a bounce between these two forces that is called the market.
And people will talk about oh the market this, the market that, but the bottom line is that the market all is, is the battle between supply and demand. And again economics, the whole point of economics is to figure out dynamics of the living world with limited resources, also known as scarcity. Scarcity is the idea that our resources are ad infinitum which they are not. Such as oil, such as food etcetera. There is a finite amount of resources and the idea is how to let them get the most value out of it by letting people who most value something use this item and letting who buy thing use those items. And this is what we call the market, which is between supply and demand. One more note actually I will leave at our fans, you know what supply demand is. Now think about this when you see the prices at the pump, think about this when you see the changing relationships of the different products across different countries in international trade. When we cut off trade with one country, there is lower supply of certain items which increases but doesn't change the demand. So it is going to effect the prices.
But certain innovation or certain changes may increase the demand on certain products, such as oil but uses other factors supply doesn't go up thus again prices go up. So when one go up and the other one doesn't you will see a change in prices depending on what the move is. So understanding the battle between supply and demand is the first step to really being able to have a clear eye on what's going on in the world economically.
So again supply, demand one, word between two sides, pretty much like Starwars. So we will leave at the prices as a first economic discussion. Other topics that I am planning talking about are economic indicators, currency, fiscal and monitory policy. Those are the four I definitely go hit up next. So keep an eye out for those, and thank you for listening.
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