QUESTION THREE (12 MARKS)

a)By using an example, explain why Adam Smith believed that the pursuit of "self-interest" by individuals that restrained by "competition" tends to bring "harmony of interest" to the society. (6 marks)

b)Robert Owen stated that "one should try to serve the community and thereby achieve one's own highest happiness". This concept reversed classical economics and Adam Smith thinking which held that self-interest would serve society. Explain what does he mean by that statement and the 'social revolution' that he introduced in his factory in New Lanark, Scotland in order to prove his theory.

(6 marks)