Themastergun-maker-th***。usuallyheownedmerelyawarehouseinthegunquarter，andhisfunctionwastoacquiresemifinsihedpartsandtogivetho。。。 The master gun-maker-the entrepreneur-seldom possessed a factory or workshop。 Usually he owned merely a warehouse in the gun quarter， and his function was to acquire semifinsihed parts and to give those out to specialized craftsmen， who undertook assembly and finishing of the gun。 Her purchased material from barrel-makers， lockmakers， sight-stampers， trigger-makers， ramrod-forgers， gun-furniture makers， and if he were engaged in the military branch， from bayonet-forgers。 All of these were independent manufacturers executing the orders of several master gun-makers。 Once the parts had been purchased from the “material-makers，” as they were called， the next task was to hand them out to a long succession of “setters-up，” each of whom performed a specific operation in connection with the assembly and finishing of the gun。 To name only a few， there were those who prepared the front sight and lump end of the barrels； the jiggers， who attended to the breech end； the stockers， who let in the barrel and lock and shaped the stock； the barrel-strippers， who prepared the gun for rifling and proof； the hardeners， polishers， borers and riflers， engravers， browners， and finally the lock-freers， who adjusted the working parts。

1。 Drawing from your reading of the Wealth of Nations’ excerpt， describe why production of guns was organized in the above fashion。 In other words， discus the efficiencies associated with the production process detailed above。 What does the structure of production imply about the extent of the market for rifles？

2。 Drawing upon ideas presented in Coase’s The Nature of the Firm， explain why coordination of the many tasks of producing guns does not occur in vertically integrated firms。 In other words， what characteristics of the above industry account for the low costs of organizing production through a series of market exchanges between independent workers？（ Focus on the three main types of transaction costs Coase described and give reason why these costs werer relatively low in the above industry， making market coordination efficient。） 展開

QMYCC已燒縣再便味包Ccc2014-09360問答-11

1

給修服受糧範經那未響

。 Based on Ada

婷讓破讀慶時

m‘s theory， se

總價志玉數緊個

perating whole working prosesses is the wa

徵居種守氫揚責離

y which creating the huge profi

迫沿流

ts， decrea

族宣足

sing the co

st and generat

ing economies o

正應伯強權普乎卷

f scale for e

希手家光職阻西這顧

nterprise。 This could be us

ed to explain

why the gun-

七資維擴陽足來指案玉未

makers would use kind of production s

trategy。 Everyo

ne just needs t

綠密日遊筆

o focus on sp

ecial work

。 It will improve the working efficiency dramatically。 It is typical applications in t

he fields of mar

ket economy and free trade。

2。T

hat is one of di

fferences between vertically integrated firms and horizontally inatetr

ated firms

。 The coordin

ation of the many

tasks cannot be embedded into vertically integrated f

席多架院突給

irms which have many levels。 “Coase noted， however， that th

ere are a n

umber of t

ransaction c

osts to using th

e market；

the cost of obtaining a good or service via the m

arket is actu

ally more than

just the p

rice of the good。 O

ther costs， i

ncluding search

and informati

on costs， bargaining costs， keeping trad

e secrets， and pol

icing and enforcement costs， can all potentially a

dd to the cost o

f procuring something via the market。 This

歲威化劉

suggests that firms will arise when they can a

值希啊礎局變土更研

rrange to produce what they ne

方感血侵封但友真入卷哪

ed internally and

山眾樂採分依

somehow avoid these costs。” （Coas

e 1937） Based on a

bove explai

nation， it co

uld say the costs were relatively low。

hop

e useful。