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Introduction to Business Module
Federal Reserve Monetary Policy MarketComputer Industry Returns Market
MSFT (Microsoft) Price Level Market
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What Is a Market? Two or more
individuals, groups, or both, who come together to make exchanges. They are often referred to as a Buyer and Seller.
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How, What and When Do They Exchange? They Exchange?
Resources with differing levels of scarcity
Different combinations of exchanges What roles can participants play in the
exchange? Types of Markets
Topics
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Resources With Differing Levels of Scarcity Physical goods, such as, Soap and Cars Services, such as, Haircuts and
Checking Accounts Money
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Different Combinations of Exchanges (1)
Goods for Goods Bartering, such as, a farmer who
trades fruit grown on their farm for wine produced by another farmer
Countertrade, such as, Ford Tractors traded for commodities, such as, wheat, hemp, or other industrial products
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Different Combinationsof Exchanges (2)
Goods for Money & $$$ for Goods Purchasing household products from Walmart Selling your car in the classified advertisements
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Different Combinations of Exchanges (3)
Services for Money Money for Services Purchasing phone service from MCI Repairing a neighbors car for money
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Different Combinations of Exchanges (4)
Promises for MoneyMoney for Promises Paying money for car insurance in exchange
for a promise by the seller to compensate you for loss or damages to your car
Receiving money from a lender (Student loans), in exchange for your promise to repay the loan plus interest, some time in the future
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Different Combinations of Exchanges (5)
Money for Money While visiting Paris, exchanging
U.S. Dollars for French Francs
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What Roles Can Participants Play in the Exchange? Buyer or Seller Rule Maker
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The Role of Buyers and Sellers
Price Setter or Price Taker Because of the scarcity of the
resource, when purchasing gasoline, the buyer is a price taker and the gas company is a price setter
What are the roles of Shaq and the Los Angeles Lakers?
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The Role of the Rule Maker
Rule makers set the ground rules for a particular market and its transactions
NASD and its members SEC in the securities market
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Types of Markets
Legal and Illegal Markets
Real and Virtual Markets
24/7 and Time Limited Markets
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Legal and Illegal Markets
Purchasing a prescription drug from your local pharmacy
Purchasing cocaine from a drug dealer
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Real and Virtual Markets Purchasing your textbook
at your college bookstore Purchasing your textbook
at Amazon.com
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24/7 & Time Limited Markets
Purchasing your textbook at Amazon.com at anytime of day and any day of the week
Auctions, such as, eBay, where the timeframe to participate or complete the transaction is limited and expires
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Markets of Interest
Labor Rules created by legislation,
such as, minimum wage laws, child labor laws, Equal Employment Opportunity Laws (e.g. ADA)
Organized labor sellers
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Markets of Interest
Land Rules intensive, attorney or
realtor involved Land is scarce and unique There are no substitutes
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Markets of Interest
Exchange Rates Market Players include:
Individuals purchasing and selling foreign currency
Multi-national Corporations, such as Ford, who periodically need to repatriate foreign currency into US Dollars
Large global banks Governments who enter the exchange to
strengthen or devalue a currency
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Markets of Interest Capital and Financial
Stocks and Bonds
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Markets of Interest
Other Financial Markets Commodities
Spot Market and Futures Market
IEM
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Conclusion
Other Financial Markets Commodities
Spot Market and Futures Market
IEM
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What is The Iowa Electronic Market (IEM) The IEM is an on-line,
computerized market Contracts are based on real-world
events A research tool A teaching tool Open to academic community
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IEM Resources
IEM Introduction PowerPoint Presentation
http://www.biz.uiowa.edu/iem/trmanual/introIEM.ppt
IEM Traders Manualhttp://www.biz.uiowa.edu/iem/trmanual/
WebExchage Users’ Guidehttp://iemweb.biz.uiowa.edu/webexmanual/