Chapter 1-Reinventing the Bazaar by John McMillan

1)  McMillan describes many defining characteristics of a market.  Towards the very beginning of the chapter, he states that "a market for something exists if there are people that want to buy it and people that want to sell it" (p. 5).  Buyers and sellers clearly indicate the presence of a market system.  Within a market there is voluntary participation.  Buyers and sellers do not have to follow orders.  However, they  are constrained by the rules of the marketplace.
Another characteristic of a market are market transactions.  These transactions also include transactions outside of the market.  Some examples of non-market transactions would include unpaid work inside households, government activities, and business that takes place inside a firm.  McMillan concludes that "it is a market economy because even these non-market transactions take place within the context of markets" (p. 7).
Transaction costs also make up one of the characteristics of a market.  These costs use up resources.  Some examples are negotiations, bargains, monitoring work (takes time and money), and enforcement of contracts.  What people may not realize is that one reason for unemployment is in fact, transaction costs.  Such costs prevent the connection between employers and those seeking work.

2)  Personally, I have observed both negative and positive views of the economy.  Until this new year, my father struggled with finding and maintaining a job that would provide enough income for our family.  My mother is disabled, therefore, she is unable to work and bring in an income.  I have seen this put extreme stress on my father, which made his many months of unemployment that much worse.  He lost faith in the economy.  My hometown is fairly well off.  Although, both situations, like my father's, as well as families that praise the economy and basically roll in their money, are apparent in my hometown's community.
I think that although everyone may have a different view of the economy and market system, it is not apparent which is the main side.  The economy experiences highs and lows, which will always influence one's point of view.

3)  McMillan's discussion of the government's role in the market made me realize which rules are important for modern markets.  I think that the government must set standards in order to set prices and manage money.  We must keep in mind that markets have evolved over the years with the increased development of technological advances.  Rules must be altered once such advances have taken place.  McMillan also notes that competition=alternatives.  If there was not competition in markets, firms would not be conscious of competitive prices, and there would likely be a domination in certain areas.