ECON 104 Chapter Notes - Chapter 5.1 -5.3: Natural Monopoly, Perfect Competition, Transfer Payment
Document Summary
The increased division of labor which economists now prefer to call specialization put humans on a path towards the complex societies we inhabit today. Specialization in production is a defining characteristic of the modern economic system and the basis for the gains in living standards over the past centuries. 5. 1 governance: managing large social and economic systems. Social research suggests that one-time interactions are much more difficult to carry out than repeated exchanges with an unchanging group of familiar relatives and fellow clan members. In general, when we use the term government we are referring to some type of governance structure that enables a society to act collectively in a coordinated manner, as opposed to uncoordinated individual actions. No form of governance can lead and enforce its will if, for example, it does not conform with society and people"s informal perceptions of justice, normality, and tradition.
