Lesson Details

Unit 2: Lesson 13 - How Markets Allocate Resources

Students read I, Pencil, by Leonard Read, to gain an understanding of Adam Smith's concept of the invisible hand of the marketplace. Students see that a system of market prices brings about cooperation without coercion. Then students use supply and demand analysis to explain how a change in one market tends to affect related markets.

Concepts:

  • Complements
  • Invisible Hand
  • Markets
  • Secondary Effects
  • Substitute
  • Supply
Standards:
  • Standard #7: Markets and Prices
  • Standard #8: Role of Prices

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