- In the Wealth of Nations, Adam Smith proposes that among the first economic exchanges were when a hunter killed a beaver but wanted to eat venison (from a deer). Show the circuit of production for this hunter. How does it change if money is introduced and the hunter sells his beaver and uses the money to buy a deer? How does the circuit of production look when you set the table and do the dishes for your family's dinner, a meal made by your father?
- Describe the circuit for a capitalist who hires workers to produce commodities that she sells for a profit? Use the circuit of production to identify problems she might face.
- Is your family's dinner exchange or Adam Smith's hunter an expansive system? What makes capitalism expansive? Use the circuit of production to identify why capitalists seek new markets for their produce, new technologies of production, and new sources of labor.
a. In the Wealth of Nations, AdamSmith proposes that among the first economic exchanges were when a hunterkilled a beaver but wanted to eat venison (from a deer). Show the circuit of production for thishunter. How does it change if money isintroduced and the hunter sells his beaver and uses the money to buy adeer? How does the circuit of productionlook when you set the table and do the dishes for your family's dinner, a mealmade by your father?
b. Describe the circuit for a capitalist who hires workers to producecommodities that she sells for a profit? Use the circuit of production to identify problems she might face.
c. Is your family's dinner exchange or Adam Smith's hunter an expansivesystem? What makes capitalismexpansive? Use the circuit of productionto identify why capitalists seek new markets for their produce, newtechnologies of production, and new sources of labor.
Externalities. United Airlines flies in and out of Logan Airport carrying people to cities throughout the world. Their flights are noisy and spread pollution over East Boston and Revere, disturbing the residents of these cities and lowering the value of their property. What are the conditions of an efficient resolution to this dispute? (1 points) If there is a law restricting noise and pollution, then what can the airline do to continue to fly to and from Logan? Can there be an efficient outcome? Would you expect this to happen?If there is a law allowing noise and pollution (or at least no law prohibiting it), then what could the neighbors do to stop the noise and pollution? Can there be an efficient outcome? Would you expect this to happen?Why do we have economic growth? What is the "Commons" and who should profit from it? Consider the argument made by Peter Barnes, article 1.5 in Real World Micro. Give some examples of commons wealth? Who creates "commons wealth"? Who benefits from it? What would be a fair and equitable allocation of the commons wealth?
Externalities. United Airlines flies in and out of Logan Airport carrying people to cities throughout the world. Their flights are noisy and spread pollution over East Boston and Revere, disturbing the residents of these cities and lowering the value of their property.
a. What are the conditions of an efficient resolution to this dispute?
b. If there is a law restricting noise and pollution, then what can the airline do to continue to fly to and from Logan? Can there be an efficient outcome? Would you expect this to happen?
c. If there is a law allowing noise and pollution (or at least no law prohibiting it), then what could the neighbors do to stop the noise and pollution? Can there be an efficient outcome? Would you expect this to happen?
2. Why do we have economic growth? What is the "Commons" and who should profit from it? Consider the argument made by Peter Barnes, article 1.5 in Real World Micro. Give some examples of commons wealth? Who creates "commons wealth"? Who benefits from it? What would be a fair and equitable allocation of the commons wealth?