Question

The economic organisation of a p.o.w. camp. write 6 sentences about it.

Answer 1

1)In the Economic Organization of aP.O.W camp, the author described that cigarettes were used ascurrency for exchange.Prisoners in a POW camp formed clear markets, institutions, and trading systems among themselves naturally.

2)However, quality of cigarettes isnot uniform. Hand-rolled cigarettes were also used for exchangepurpose and their quality is not homogeneous at all.

3)In fact,people were broking the factory made cigarettes to make hand-rolledcigarettes and these inferior quality hand-rolled cigarettes hasvirtually driven out the factory-made superior quality cigarettesout of circulation as money.

4)This is similar to what Gresham\'sLaw predicted that bad money drives out the good money.

5)So, the \'bad currency\' the prisonersexchanged is hand-rolled cigarettes.

6)The equilibrium price is different in the short and the long run.In the short run your equilibrium point in terms of price is where your marginal cost curve intersects your marginal revenue curve. now in teh short run depending on whether there is an excess or a shortage of firms your company will be making losses or profits respectively. in teh long run however due to the absence of barriers to entry new firms will enter or exit depending on the profits meaning that the short run price will be formulated where marginal costs and marginal revenues equal to zero.

Summary of P.O.W : Essay explains that middlemen were ignored and their profits were recognized as the result of sharp practices.In this essay the economic organization within a P.O.W camp is discussed. This essay discusses how cigarettes became the currency due to their durabilityand size convenience.