Class summary 9/30

Econ 108    Fri 9/30/11

GOODS    -----   GOLDS

Three things of trading with other countries if the king manages it: 

1. Competition            

2. Imitation (learning)           

3. DIVISION OF LABOR

Two reasons why division of labor is important: 

a.     better to have people specializing in every fields

b.     for future benefits

Three things need to do for the government in order to have good outcome:

a.     Police+ Courts

b.     National Defense

c.      Public Goods

Chance for success:

a.     Rights to property

b.     Division of Labor

c.      Exchange is peaceful (cannot kill or rob to attack to get things from others)

d.     No Special Privilege

Adam Smith-------- Source of wealth is the ability to produce and exchange

Spontaneous Order

Price goes up, land owners benefit from it. ------ Corn Law