problem set 1 number 2

problem set 1 number 2 - profit. C still represents...

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2a.  An artisan who produces goods for his own use and exchanges some of the surplus  for luxury goods does not make a money profit.  This is represented by the equation C-C’.  This means that the artisan is exchanging commodity for commodity for his own use.  The artisan uses his own goods to survive, but will trade the surplus for extra necessities  that he may need or want.   b. As opposed to artisans, capitalists produce to make a profit.  Capitalists spend money  to hire people to do the labor to produce a good for profit.  This is represented by the  equation M-C-C’-M’.  M represents the money spent, and M’ is the money made as a 
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Unformatted text preview: profit. C still represents commodities, and C’ represents more commodities. Capitalism is an expansive system because they invest money to make a profit. When they make their profit they invest again in hope to make more of a profit. Capitalists are constantly trying to gain profit by looking for new technology, labor, and markets to save money and time. New technology could make production faster, hence saving the time it takes to get done, so the labor costs would be less. With finding ways for better production, the profit can constantly grow....
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This note was uploaded on 04/02/2012 for the course ECON 103 taught by Professor Voorheis during the Spring '08 term at UMass (Amherst).

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