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Questions and Answers
What is the main criticism Aristotle has regarding usury?
What is the main criticism Aristotle has regarding usury?
- It generates profit from money itself rather than from its use. (correct)
- It creates wealth through the natural use of money.
- It is a natural way of making money.
- It encourages the exchange of goods instead of currency.
According to the concept of bullionism, what primarily defines a country's wealth?
According to the concept of bullionism, what primarily defines a country's wealth?
- The number of citizens employed.
- The amount of goods produced.
- The investment in infrastructure.
- The amount of precious metals it owns. (correct)
What does the term 'use value' refer to?
What does the term 'use value' refer to?
- The potential profit from selling a good.
- The subjective, qualitative value of a good or service. (correct)
- The quantity of goods a country possesses.
- The monetary valuation of goods in trade.
What does Aristotle suggest is the intended purpose of money?
What does Aristotle suggest is the intended purpose of money?
How did Xenophon illustrate the concept of wealth in his quote?
How did Xenophon illustrate the concept of wealth in his quote?
What is a key characteristic of the manorial system?
What is a key characteristic of the manorial system?
Which thinkers primarily influenced the Just Price Doctrine?
Which thinkers primarily influenced the Just Price Doctrine?
What does normative economics primarily focus on?
What does normative economics primarily focus on?
In the context of guilds, what is their main purpose?
In the context of guilds, what is their main purpose?
What economic principle argues that markets operate best with minimal government intervention?
What economic principle argues that markets operate best with minimal government intervention?
How did the Just Price Doctrine view profit-making?
How did the Just Price Doctrine view profit-making?
Which of the following describes the concept of usury?
Which of the following describes the concept of usury?
What is an example of a factor that would not be considered under the concept of comparative advantage?
What is an example of a factor that would not be considered under the concept of comparative advantage?
What concept is illustrated by Xenophon's statement regarding the specialization of trades in large cities?
What concept is illustrated by Xenophon's statement regarding the specialization of trades in large cities?
According to Adam Smith, what is largely responsible for the improvement in productive powers of labor?
According to Adam Smith, what is largely responsible for the improvement in productive powers of labor?
In the context of trade and value, what does 'exchange value' primarily depend on?
In the context of trade and value, what does 'exchange value' primarily depend on?
How does feudalism relate to the economic concepts presented by Xenophon and Karl Marx?
How does feudalism relate to the economic concepts presented by Xenophon and Karl Marx?
Which thinker directly discusses the effects of labor specialization on production efficiency?
Which thinker directly discusses the effects of labor specialization on production efficiency?
What is the role of the 'invisible hand' in economic theory, which is contrasted against concepts of feudalism?
What is the role of the 'invisible hand' in economic theory, which is contrasted against concepts of feudalism?
Which economic concept involves the accumulation of precious metals as a measure of wealth?
Which economic concept involves the accumulation of precious metals as a measure of wealth?
What can be inferred about the economic system favored by Adam Smith in terms of labor and specialization?
What can be inferred about the economic system favored by Adam Smith in terms of labor and specialization?
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Study Notes
Use Value
- Subjective value of a good or service
- Example given: Flutes are valuable to someone if they know how to play them
Usury
- Lending money with interest
- Considered unnatural by Aristotle
- “The most hated sort, and with the greatest reason, is usury, which makes a gain out of money itself, and not from the natural use of it.For money was intended to be used in exchange, but not to increase at interest.And this term usury … which means the birth of money from money, is applied to the breeding of money because the offspring resembles the parents.Wherefore of all modes of making money this is the most unnatural.” – Aristotle
Bullionism
- Country’s wealth is defined by how much gold and silver it owns.
Guild
- Association of producers who regulate a local market, with rules on methods of production and pricing.
Just Price Doctrine
- Response to ethical debate surrounding usury
- Just price depends on location, time, and risk of transport
- Profit making is only virtuous if there is a just price in exchange
Manorial System
- Preceding the market system, local lords held political, military, social and economic power.
Normative Economics
- Value judgments about economic fairness, policies, and economic activity outcomes.
- “Just as the various trades are most highly developed in large cities, in the same way food at the palace is prepared in a far superior manner.In small towns the same man makes couches, doors, ploughs and tables, and often he even builds houses, and still he is thankful if only he can find enough work to support himself.And it is impossible for a man of many trades to do all of them well.In large cities, however, because many make demands on each trade, one alone is enough to support a man, and often less than one: for instance one man makes shoes for men, another for women, there are places even where one man earns a living just by mending shoes, another by cutting them out, another just by sewing the uppers together, while there is another who performs none of these operations but assembles the parts, Of necessity, he who pursues a very specialized task will do it best.” – Xenophon Cyropaedia Book VIII, ch.ii
Exchange Value
- Quantitative value of a good or service
- Shows what other commodities it can be exchanged for.
Feudalism
- Social system where people were given land and protection in exchange for loyalty and service.
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