By Jack Harvey (auth.)
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Extra resources for Intermediate Economics
No more offers? For the last time of asking, any advance on £650? ' Down comes the hammer. ' This is the local cattle market. On his stand above the cattle ring is the auctioneer. Inside the ring, a black and white heifer is appraised by local farmers and dealers. Some are buyers, some sellers. The market fixes the price at which those who want something can obtain it from those who have it to sell. Note that it is only exchange value which is significant here. The farmer selling the heifer may have felt that it ought to have made more than £650.
This gives rise to a series of 'general' questions. How can the total of consumers' demand in the economy change? How do firms in total respond to such a change in demand? What brings about changes in the general level of prices? We are now looking at variables in the aggregate- the aggregate flow of income, aggregate investment, aggregate wages, and so on. Such questions are the concern of macroeconomics (from the Greek word makros meaning 'large'). The difference in approach in the construction of models for micro- and macroeconomics is described in Chapter 26.
An ageing population means, to take extreme examples, that wheelchairs will be The Population as Consumers and Producers 35 wanted in place of prams, walking sticks in place of hockey sticks, tea in place of milk. For many of these new wants, consideration has to be given well in advance. Today, almost one-quarter of British households consist solely of pensioners and, when planning a housing programme, we have to provide the smaller units and sheltered housing they require~ Similarly, the fall in births since 1964 has resulted in fewer school places and teachers being required.
Intermediate Economics by Jack Harvey (auth.)