shipments include raw materials, such as iron ore, logs, and oil; parts,
such as automobile engines, transistors, and circuit boards; tools, such as
screwdrivers, lathes, and digging equipment; perishables, such as fresh
flowers, coffee beans, and fruit; and all kinds of manufactured goods,
such as washing machines, computers, and smartphones. Trains and
trucks move these goods among thousands of different destinations
within Canada. Some go directly to consumers. Others are used by local
firms to manufacture their products—some of which will be sold
domestically and others exported to other countries. Remarkably, no one
is actually organizing all of this economic activity.
The Concept of a Market
An economy is a system in which scarce resources—labour, land, and
capital—are allocated among competing uses. Let’s consider how this all
happens in a market economy.
Self-Organizing
Early in the development of modern economics, thoughtful observers
wondered how such a complex set of decisions and transactions gets
organized. Who coordinates the whole set of efforts? Who makes sure
that all the activities fit together, providing jobs to produce the things that
people want and delivering those things to where they are wanted? The
answer, as we said above, is nobody!