ECO 1104 Lecture Notes - Lecture 6: Comparative Advantage, Invisible Hand, Bourgeoisie

• School: University of Ottawa
• Department: Economics
• Course: ECO 1104
• Professor: Lawrence Harris

Document Summary

They used a limited budget to best provide for all the needs of a household, and figure out who was going to do what. However, the so(cid:272)ial s(cid:272)ie(cid:374)(cid:272)e of (cid:862)e(cid:272)o(cid:374)o(cid:373)i(cid:272)s(cid:863) is (cid:373)ore re(cid:272)e(cid:374)t. the invention of the steam engine (1769, James watt), replaced the slow production and manual labour. The industrial revolution gave a new focus to the economy and it created the bourgeoisie who were capitalists who owned most of the means of production. Competition was created and supply and demand were born. Adam smith, father of economists, was a scottish professor who analyzed the behaviour of the new business class in his book, the wealth of nations. Efficiency, and not wasting, was the way to get ahead putting every resource to the best use. The efficiency was brought about by the division of labour. If people specialized, such as creating an assembly line, there was a better use of resources.