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years after her successful Conversations on Chemistry, anticipated some of RICARDo's ideas and was praised by both him and SAY. Her Stern summary of CLASSICAL ECONOMICS takes the form of conversations between Mrs B and Caroline on twentyone topics, including property, division of labour, capital, wages, population, the condition of the poor, revenue from factors of production, value, money, foreign trade and expenditure. Caroline is encouraged to study economics as 'you will seldom hear a conversation amongst liberal-minded putational experience in applying this principle has increasingly dealt with the problems of fixed costs, complex production and distribution systems and changes in demand and technology. Critics of this type of pricing remain concerned about its MONOPOLY and lNCOME DISTRIBUTION effects. <br /><em>See also:</em> female economists

coefficient of correlation (C1)<br />Referred to as r by statisticians and used as a measure of the interrelatedness of two variables. This coefficient is measured by the formula & :L {x y )
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factor tax (H2)<br />A tax levied on a particular income-earning FACTOR OF PRODUCTION. Taxes on capital, taxes on residential and commercial property and taxes on employment are important examples.

of taxation matches the amount of PUBLIC Gooos received by each taxpayer. The principle was first enunciated by Thomas Hobbes (1588-1679), Hugo Grotius (1583-1645) and John Locke (1632-1704). In essence taxpayers and a government exchange taxes for services. Since public goods are collectively provided and taxes are individually paid, a taxation system on this basis will always be criticized. For example, it would be difficult to allocate charges for the maintenance of external defence to individuals in proportion to their consumption. Until governments know more of the preferences of taxpayers it will be impossible to apply the principle exactly.
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