Referring to the definition of a market, consider whether the following groups of buyers and sellers are part of the corresponding market.

1. Opponents of the Iraqi government periodically sabotage the pipelines through which Iraq exports oil to the rest of the world. Is Iraq part of the world market for oil?

In this situation Iraq’s oil supply cannot do a huge change in world oil market. But if the Iraq stops supplying oil to the world market, Iraq’s income will be limited due to limited supply of oil. So, the opponents of the Iraq government can create an advantage based on this situation.

2. Prisoners cannot freely work outside the jail. Do prisoners belong to the national labor market? Prisoners cannot work freely outside the jail hence they are on a probation program. They have limited rights. If they freely work outside the jail, they are violating the penalty which government assigned them. Even they have limited rights, they have limited rights, they belongs to the national labor market hence the labor hours they provide is accounted for production.

3. The Australian national electricity transmission grid links eastern states including New South Wales, South Australia, and Victoria, but does not link Western Australia. How would price changes in Western Australia affect the other states? The price change in Western Australia would not affect the other states hence all the other states are in a cost controlled grid link.

In each of the following instances, discuss whether horizontal or vertical boundaries have been changed, and whether they were extended or shrunk.

1. General Motors divested Delphi Automotive Systems, which manufactures automotive components, systems and modules.

Vertical boundaries shrunk.

2. Online auction service eBay acquired Skype, a