Why people trade

Principles of Economics // Fall 2025

Prof. Santetti

marcio.santetti@emerson.edu

An experiment

An experiment — Round 1


  • Have your items with you.

  • Half to the right, half to the left side of the classroom.

  • You are not allowed to talk to people from the “other side.”

  • You will have 10 minutes to talk to each other, ask questions, and trade items.

An experiment — Round 2



  • You are no longer divided in two sides.

  • You are allowed to talk/trade with everyone in the room.

Why people trade

Why people trade


Trade is the exchange of goods and services.


  • Winning vs losing
  • Costs vs benefits


  • The (main) role of money

    • Solves the double coincidence of wants problem.

Next time: Why countries trade