A4+-+natural+laws+of+economics


 * What are the natural laws of economics according to Adam Smith? **

This is the economic theory that a "free market" has the ability to fix itself if there is an economic disaster without needing the aid of the government (laissez faire). LAISSEZ- FAIRE ECONOMICS
 * Natural law:**

__'laissez faire, laissez passer__' meaning live and let live or __'let nature take its course'__

Things sort themselves out if they are left alone.

Natural pricing will occur, things will price themselves in the best way possible if left alone.

ADAM SMITH believed that laws that would prevent monopolies were good.

People usually do not work solely for helping others, but also, if not only for the money. They are not usually concerned about the quality of the product, but more about what will benefit them.
 * The Law of Self-interest **

When there is a high demand for a certain item, people generally will pay more than what the product is actually worth. Because of the demand other businesses will rise and this will create competition. This benefits the consumer because the quality will become better and the prices will go lower because the business will want the consumer to buy the better product.
 * The Law of Competition**

If there is a surplus of quantity of a product, the demand will lower because it is easier to find and buy the item. There will not be enough consumers to buy it and to try to get consumers to buy the product the price will lower.
 * The Law of Supply and Demand**

Other Info: -Mercantilism Restrain imports and export as much as possible, Seizing the upper hand by being the provider and not depending on someone else.