This question <49|64> overall <60|62> KaiserW: <488|166-1>.  
  Exam Question 117: Explain the different parts played by coat and linen in the equation “20 yards of linen = 1 coat.”   
  [61] KaiserW: Linen vs. Coat   In this equation there are two parts; 1. The linen, which can be used as a payment or it can be used as a raw material for making clothing. 2. The coat, this can be seen as either the product of the raw material or the payment for the linen. These two different ways of perceiving each part of the equation can also be analyzed a little further. The raw material linen is seen not as a payment but the base of another commodity. The linen maker could use this raw material to get a coat made for himself/herself, this would still entail the same factors of the equation. Using the linen as a payment through a barter or exchange system, shows it as a use of payment. Even though other commodities can be used to exchange for a coat (i.e. Fox pelts, Potatoes, etc.), linen is interchangable between both Commodities. The coat, as I see it, is a product from the linen that was traded to the tailor. As the final product is started another consumer can come to the tailor with his/her own linen and trade it for a coat. The tailor would then use that persons linen to make a coat. Also the coat can be traded to the linen maker for 20 yards of linen, if that tailor runs low on linen from trading his/her coats for other commodities (Deer meat, Turnips, etc.). This shows the other part played by the tailor's coat. As the discussion goes on about the set value of a product, we will find that these exchanges worked better then a fixed exchange rate, if you would only trade linen for coats, then two people would have a surplus of each, with no fixed exchange, there would be a more evenly distributed market of commodities. If the linen weaver had too many coats she could trade it to the hunter/trapper for meat or pelts, and the circle would go everlasting. This is one way of proving that there are other parts to be played by the factors of the equation.   
  Hans: Try to get your text formatted better the next time you make a submission.   
 
 
 
  Students enrolled for Econ 5080 in 2009fa are invited to give feedback to the above message
Pseudonym:      UofU ID:  
Text: