ECON 2720 Lecture Notes - Lecture 7: Communist Society, Ronald Coase
2 Feb 2017
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2:37 pm: fall of rome, before fall of rome, britain had been a part of europe wide monetary trading area. Shift away from export focus to domestic market. Lower income: assorted seaborne invasions from germans. Became unsafe when legions from rome left. Fragment markets within england due to lack of travel: shift from england-wide market to local market. A couple villages: disrupts process of trade, region of france specializing in the production of wine (good climate and soil conditions) Region is on a river that leads directly to paris, river transportation very cheap. Other producers from other area of france have their own specialized products to paris. Market in paris, take revenue from selling wine, buy other products they need to eat. You have an advantage producing one type of product. Trading with places that have a comparative advantage of producing something else. Cut back on production and grow own food, but soil is not good for other crops.
