The Free Market Adam Smith and “The Wealth of Nations”

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Presentation transcript:

The Free Market Adam Smith and “The Wealth of Nations”

Which phone would you choose?

White Basic cellphone functions Grey Basic cellphone functions black Basic cellphone functions

How would you choose?

Price?Quality?Features?

Scenario 1: Which phone would be bought the most? White Basic cellphone functions $50 Fair quality Grey Basic cellphone functions $100 Good quality black Basic cellphone functions $300 High quality

Scenario 2: Which phone would be bought the most? White Basic cellphone functions $50 Fair quality Grey Basic cellphone functions and text $100 Good quality black Basic cellphone functions and text $300 High quality

Scenario 3: Which phone would be bought the most? White Basic cellphone functions and text $50 Poor quality Grey Basic cellphone functions and text $75 Good quality black Basic cellphone functions $200 High quality

Scenario 4: Which phone would be bought the most? Various colours Basic cellphone functions $50 Poor quality Grey Basic cellphone functions and text $75 Good quality silver Smartphone $100 Good quality

Smith’s Popular Ideas The market will supply what consumers demand (the law of supply and demand) Consumers will determine the price The “invisible hand” will help make selfish motivations into benefits for society Only the best products will survive - competition will weed out inferior products As an economic system, the free market allows the best ideas to rise to the surface and benefit everyone