|Lecture handout: Market equilibrium*
Textbook Reading: Chapter 3 (Intro, Section 3.1, 3.2; pp. 65-83)
This video shows how prices are formed at the London Metal Exchange:
And this video shows a behind the scenes look at “the ring”:
In March 2022 the price of Nickel jumped dramatically in early trading and the CEO of the LME decided to suspend trading and cancel previous orders. The hedge fund Elliott Associate had made almost half a billion pounds from the market turbulence and decided to sue. Read more about it here.
I use this as a follow up exercise:
|Group activity: Copper at the LME, December 2022|
|Instructor resource: Copper at the LME Solutions, December 2022|
This page ties into Chapter 3 of Economics: A Complete Guide for Business
|Learning Objectives: Apply basic comparative statics to a range of economic events. Understand how interventions affect market activity
Focus on diversity: Legendary microeconomics instructor Walter Williams (1936-2020) wrote extensively on how government restrictions on mutually beneficial exchange can harm minority groups. He studied the impact of minimum wage legislation in apartheid South Africa and published a book called ‘The State Against Blacks‘ . Here is a video about his autobiography, ‘Up From the Projects‘. Here is video footage of a toast from 2003, which occurred when I was his student. Here is a fitting GMU economics department tribute to his career. And here is the gift he left people like me, to stop me doing things like this.