Microeconomics
In his famous book The Wealth of Nations, Adam Smith stated: “It is not from the benevolence of the butcher, the brewer, or the baker that you expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.”
What do you think Adam Smith meant in this statement? Try to use concepts such as specialization, mutual gains from trade, market coordination, etc. in your interpretation.
At least 200 words along with what ever referencesyou use and please cite all work where necessary.
…………….Answer Preview……………..
According to Adam Smith, the brewer, butcher and the baker conduct their activities with an aim of benefitting themselves. However in this process of acting on self-interest they end benefitting the society (Smith & Smith, 2010). This is achieved through specialization whereby the butcher specializes in selling meat, the baker in baking bread while the brewer in brewing wine and other alcoholic drinks. However, these people end up participating in trade whereby they exchange among themselves the commodities that they…………………
APA
244 Words