Lesson 6- Early and Classical Economies
Once you have completed this chapter, you should be able to:
you will be able to understand and explain the key ideas of a variety of prominent economic theorists
Physiocrat
A believer in the eighteenth-century philosophy that argued that laws created by humans are artificial and unnecessary because they interfere with natural laws (such as an individual’s pursuit of self-interest), which would ultimately benefit all of society.laissez-faire
A French term meaning “leave to do” or “let alone,” which became associated with the idea that an economy operates best if individuals are allowed to pursue their own self-interest without government interference.Industrial Revolution
The period of technological innovation and factory production, beginning in Britain in the late eighteenth century, that eventually changed an economy that was largely agricultural and rural to one that was industrial and urban.Invisible hand
Adam Smith’s notion that the unintended result of individual producers' desire for profit is to supply society with the goods and services it needs, at prices consumers are willing to pay, as a result of competition.Division of labour
The specialization of workers in a complex production process, leading to greater efficiency.Absolute advantage
The capacity of one economy to produce a good or service with fewer resources than another.Comparative advantage
The capacity of one economy to produce a good or service with comparatively fewer resources than another (for example, having a lower opportunity cost).Students to complete this after you've finished all activities/tasks in today's lesson.
