Microeconomics,, 16th Canadian Edition

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1.2 The Complexity of Modern


Economies


If you want a litre of milk, you go to your local grocery store and buy it.
When the grocer needs more milk, he orders it from the wholesaler, who
in turn gets it from the dairy, which in turn gets it from the dairy farmer.
The dairy farmer buys cattle feed and electric milking machines, and he
gets power to run all his equipment by putting a plug into a wall outlet
where the electricity is supplied as he needs it. The milking machines are
made from parts manufactured in several different places in Canada, the
United States, and overseas. The parts themselves are made from
materials produced in a dozen or more countries.


As it is with the milk you drink, so it is with everything else that you buy.
When you go to a store, or shop online, what you want is normally
available. Those who make these products find that all the required
components and materials are available when they need them—even
though these things typically come from many different parts of the world
and are made by many people who have no direct dealings with one
another.


Your own transactions are only a small part of the remarkably complex
set of transactions that takes place every day in a modern economy.
Shipments arrive daily at our ports, railway terminals, and airports. These

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