Industrial Capitalism and Society1 This is history.
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Industrial Capitalism and Society1
This is history.

Transcribed Image Text:Industrial Capitalism
Industrial capitalism refers to an economic and social system in which trade, industry and
capital are privately controlled and operated by individuals for profit. The essential
feature of capitalism is the motive to make a profit. As Adam Smith, the 18th century
philosopher and father of modern economics, said: "It is not from the kindness of the
butcher, . or the baker that we expect our dinner, but from the fact that they are
thinking of their own [self-interest)." Both parties (people) to a voluntary exchange
transaction have their own interest in the outcome, but neither can obtain what he or she
wants without addressing what the other wants. It is this rational self-interest that can
lead to economic prosperity.
Working it out..
Imagine the scenario above with the butcher. Why does Adam Smith declare that
butcher and bakers are not selling their products out of the "kindness" of their hearts?
In a transaction between the customer and the butcher, what does each party need to
give up in order to get what they want?
Understanding Supply and Demand
Kraft Macaroni & Cheese
Electric Scooter
$4.50/single box
$198.00
macarons
CHeese
$10.98/3 pack
GAng
1. Why does a box of mac n cheese cost significantly less than an electric scooter?
Explain.
2. Why do you think the price of a box of mac n cheese costs around $4.50? How is
that price set? Could you find a lower price for this item? A higher price? Why?
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