Reference no: EM131173918
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.
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.
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