ECS3705-Study-unit-2

Section A: This section counts 40 marks – have to explain 8 concepts counting 5 marks each.  The fear of goods One of the principles of the Mercantilist school is duty free importation of raw materials that could not be produced domestically, protection for manufactured goods and raw materials that could be produced domestically and export restrictions on raw materials. Emphasis on exports & a reluctance to import has been called the fear of goods.  The division of labour Petty did not develop this idea in details but he did recognize the economies associated with the specialization of labour and division of tasks. Adam Smith later further developed the idea. Smith said the division of labour increased the quantity of output produced for 3 reasons – 1. Each worker develops increase dexterity in performing on single task repeatedly. 2. Time is saved as workers need not go from one task to the other. 3. Machinery can be designed to increase productivity once tasks have been simplified & made routine.