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AEM 250 Lec 7 Market Efficiency 9-10-10 sv

AEM 250 Lec 7 Market Efficiency 9-10-10 sv - Adam Smith...

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Adam Smith and the Virtues of “Self Love” (a.k.a. Self Interest) … man has almost constant occasion for help from his brethren, and it will be vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and show them that it is to their advantage to do for him what he requires of them. Whoever offers a bargain of any kind proposes to do this Whoever offers a bargain of any kind proposes to do this. Give me that which I want, and you shall have that which you want, is the meaning of every such offer; and it is in this manner that we obtain from another the far greater part of those good offices which we stand in need of. It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest We address ourselves not to their humanity but to 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. - The Wealth of Nations, 1776
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Market Supply = Market Demand (P=0.75, Q=75) 2.25 2.50 1.50 1.75 2.00 per kL Market Supply 1.00 1.25 ce $AU p Market Demand 0 25 0.50 0.75 Pric 0.00 0.25 0 25 50 75 100 125 150 175 200 225 250 Million kL per Quarter Market Equilibrium is Where Market Supply Equals Market Demand
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