ECON 1001 Lecture Notes - Lecture 7: Comparative Advantage, Human Capital, Externality
Document Summary
We used to trade human beings which was seen as natural. Can be wrong when the object of trade is morally repugnant (shouldn"t be traded in the first place) (slavery, child labour) When the trade is not free or when the parties are not adequately informed. When parties engaged in the transaction are not the only ones affected externalities . They aren"t part of the transaction but part of the process. Ie: bees, if you"re a beekeeper you have positive effects on others. It depends on who gets a voice in the transaction. This depends on laws and customs in a country. They make it more expensive to put gas in their cars with taxes. They want people to not drive as much. If there is too much trade because a good or service has harmful effects that are not paid for by the market participants, governments will typically limit that trade by: a)
