## Topic outline

• ### Prices

Now, let's think about it. If I tell you a watermelon costs $5 and a bicycle costs$250, you understand the relative value of the two items. If I tell you a buzztaberwoopie costs \$20, you have an understanding of the value of a buzztaberwoopie even though you have no idea what it is. So, our price system tells us the relative value of things, and it also lets us decide if something is worth you buying it.

Now, imagine we didn't have prices. How would our economy decide who gets what?