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Questions and Answers
What concept did John Stuart Mill introduce to differentiate types of pleasures?
What concept did John Stuart Mill introduce to differentiate types of pleasures?
Which of the following best describes Amartya Sen's main critique of traditional utility theory?
Which of the following best describes Amartya Sen's main critique of traditional utility theory?
What does the Liberty Principle proposed by John Rawls advocate for?
What does the Liberty Principle proposed by John Rawls advocate for?
In behavioral economics, which game exemplifies people's preference for fairness over monetary gain?
In behavioral economics, which game exemplifies people's preference for fairness over monetary gain?
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Which of the following describes the capabilities approach introduced by Amartya Sen?
Which of the following describes the capabilities approach introduced by Amartya Sen?
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What is a characteristic of open-access property as defined in property rights?
What is a characteristic of open-access property as defined in property rights?
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Which philosopher is known for the pleasure-pain calculus?
Which philosopher is known for the pleasure-pain calculus?
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Which principle of justice proposed by John Rawls allows for social inequalities?
Which principle of justice proposed by John Rawls allows for social inequalities?
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What was Plato's perspective on property in Ancient Greece?
What was Plato's perspective on property in Ancient Greece?
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According to Aristotle, what are the benefits of private property?
According to Aristotle, what are the benefits of private property?
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Which of the following thinkers viewed property as a social construct arising from state authority?
Which of the following thinkers viewed property as a social construct arising from state authority?
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What economic concept did Karl Marx criticize regarding private property?
What economic concept did Karl Marx criticize regarding private property?
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What role do property rights play in economic development?
What role do property rights play in economic development?
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What did John Stuart Mill believe about private property?
What did John Stuart Mill believe about private property?
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What challenge is associated with weak property rights in developing countries?
What challenge is associated with weak property rights in developing countries?
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What was a significant contribution of Friedrich Hayek and Milton Friedman regarding property rights?
What was a significant contribution of Friedrich Hayek and Milton Friedman regarding property rights?
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What primarily influences price in the short run?
What primarily influences price in the short run?
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According to classical economists, what determines the natural price?
According to classical economists, what determines the natural price?
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During which historical period did John Calvin influence the perception of usury?
During which historical period did John Calvin influence the perception of usury?
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What is a main function of money as it evolved from the barter system?
What is a main function of money as it evolved from the barter system?
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Which economist stressed the integration of supply-demand equilibrium?
Which economist stressed the integration of supply-demand equilibrium?
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What concept unifies use value and exchange value according to marginalist economists?
What concept unifies use value and exchange value according to marginalist economists?
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Why were usury practices viewed negatively in ancient laws?
Why were usury practices viewed negatively in ancient laws?
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What did classical economists believe about interest rates?
What did classical economists believe about interest rates?
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What did Jean-Baptiste Say emphasize regarding taxation?
What did Jean-Baptiste Say emphasize regarding taxation?
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What is a key argument against progressive taxes as articulated by John Stuart Mill?
What is a key argument against progressive taxes as articulated by John Stuart Mill?
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According to the Keynesian approach, what is seen as a method to stimulate economic activity?
According to the Keynesian approach, what is seen as a method to stimulate economic activity?
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Which taxation model promotes simplicity and neutrality as advocated by Friedrich Hayek and Milton Friedman?
Which taxation model promotes simplicity and neutrality as advocated by Friedrich Hayek and Milton Friedman?
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What did Friedman propose as a direct welfare mechanism for low-income individuals?
What did Friedman propose as a direct welfare mechanism for low-income individuals?
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What is the term coined by Richard Cantillon to describe the unequal effects of new money injections in the economy?
What is the term coined by Richard Cantillon to describe the unequal effects of new money injections in the economy?
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What is generally defined as a recession in economic terms?
What is generally defined as a recession in economic terms?
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Which theory explains the misalignment of voter incentives and government policies due to rational ignorance?
Which theory explains the misalignment of voter incentives and government policies due to rational ignorance?
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What is the primary argument of Keynesian Economics against Say's Law?
What is the primary argument of Keynesian Economics against Say's Law?
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According to Austrian Business Cycle Theory, what is a major consequence of artificial interest rate manipulation?
According to Austrian Business Cycle Theory, what is a major consequence of artificial interest rate manipulation?
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What concept introduced by Keynesian Economics explains the potential for government intervention in the economy?
What concept introduced by Keynesian Economics explains the potential for government intervention in the economy?
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What does the IS-LM model primarily analyze?
What does the IS-LM model primarily analyze?
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What was a critique of Say's Law proposed by Thomas Malthus?
What was a critique of Say's Law proposed by Thomas Malthus?
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What did David Hume emphasize regarding money supply and economic activity?
What did David Hume emphasize regarding money supply and economic activity?
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What aspect of market behavior do New Classical Economics emphasize?
What aspect of market behavior do New Classical Economics emphasize?
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What do New Keynesian Economics attribute as barriers to market self-correction?
What do New Keynesian Economics attribute as barriers to market self-correction?
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What did the 'providentialist' theory suggest about the distribution of resources?
What did the 'providentialist' theory suggest about the distribution of resources?
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What is one criticism of the mercantilist trade doctrine?
What is one criticism of the mercantilist trade doctrine?
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According to Adam Smith, countries can benefit from trade through which concept?
According to Adam Smith, countries can benefit from trade through which concept?
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The Heckscher-Ohlin model explains comparative advantage based on what factor?
The Heckscher-Ohlin model explains comparative advantage based on what factor?
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What does the Stolper-Samuelson theorem predict about free trade?
What does the Stolper-Samuelson theorem predict about free trade?
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In New Trade Theory, what is emphasized as a reason for intra-industry trade?
In New Trade Theory, what is emphasized as a reason for intra-industry trade?
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David Ricardo's comparative advantage suggests that countries can benefit from trade by specializing in what?
David Ricardo's comparative advantage suggests that countries can benefit from trade by specializing in what?
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What significant economic change did South Korea undergo according to New Trade Theory?
What significant economic change did South Korea undergo according to New Trade Theory?
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Study Notes
History of Economic Ideas
- Monopolistic competition is a concept emphasizing non-price competition and product differentiation to gain market power. Edward Chamberlain and Joan Robinson developed this idea.
- Keynesian Revolution introduced macroeconomic theory during the Great Depression. John Maynard Keynes argued that insufficient aggregate demand causes high unemployment. He advocated for government intervention.
- The Monetarist Counterrevolution, led by Milton Friedman, challenged Keynesian economics. Friedman proposed the permanent income theory and asserted that money supply directly impacts price levels.
- The Marginalist Revolution of the late 19th century saw marginal utility as the basis for value, shifting focus from labor. Key figures include William Stanley Jevons, Carl Menger, and Léon Walras.
- Classical Economics, pioneered by Adam Smith, highlights the division of labor and self-interest as drivers of economic growth. Ricardo and Malthus extended these concepts, especially comparative advantage and population dynamics.
- Behavioral economics and experimental economics examine psychological factors impacting decision-making. Experimental economics tests economic theories.
- Non-European thinkers, like Confucius and al-Ghazâlî, made significant contributions to economic thought.
- Mercantilism emphasized national wealth through trade balance. Physiocrats promoted laissez-faire policies, recognizing that agriculture is a source of wealth.
Ethical Foundations of Economics
- Ethical dimensions exist in economic decision-making regarding scarce resources.
- Ethical questions are central to market interactions, influencing theories from ancient philosophers to modern economists. Ancient economic thought focused on virtues like justice and moderation.
Property Rights
- Property rights define legal ownership and transfer of assets.
- Private property is owned by individuals or entities with exclusion rights.
- Common property is shared by a group with collective decision-making.
- Public property is managed by governments for public use.
- Historical evolution of property rights traces concepts through ancient Greece, the Middle Ages, and Enlightenment thinkers.
- Key figures in the evolution of these ideas include Plato, Aristotle, Thomas Aquinas, and Thomas Hobbes
Price Theory
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Modern price theory focuses on market value (supply and demand) as a determinant of price.
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History highlights important milestones like Augustin Cournot's supply-demand graph and Alfred Marshall's work, emphasizing justice and ethical considerations within exchange.
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Classical Economists built theories around value and how labor and costs are involved.
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Marginalist thinkers shifted the focus of value to subjective value tied to preferences.
Money, Lending, and Interest
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The evolution of money, from barter systems to modern currency, affects exchange and value.
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Ancient laws and views regarding usury (charging interest on loans) were frequently viewed negatively.
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Classical and modern economic thought on interest and money are relevant.
Public Finance
- Governments use taxation and debt for funding public spending in a variety of applications.
- Historical tax theory traces back to ancient civilizations, where taxes were linked to justice and wealth.
- Classical economists analyzed taxation, highlighting issues of equity, efficiency, and the role of the state.
Economic Growth
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Economic growth, increasing material standards of living, stems from compounding.
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Classical economic theories analyze aspects of growth, particularly divisions of labor and capital accumulation, noting diminishing returns.
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Endogenous growth theory emphasizes innovation and ideas as drivers for growth.
International Trade
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International trade theories analyze factors influencing trade patterns and benefits for countries.
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Pre-classical trade theories focused on distributive aspects of resources and justice.
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Mercantilists advocated that nations should accumulate wealth through a trade surplus.
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Classical thinkers explored different models including absolute advantage, comparative advantage, and the roles of factors of production.
Theories of Recessions and Depressions
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Early economic downturns were often attributed to natural causes.
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Modern business cycles incorporate phases that repeat.
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Key historical examples like the Great Depression illustrate the severity of large and protracted downturns.
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Description
Test your knowledge on key economic theories and contributors from classical economics to the Keynesian Revolution and beyond. Explore significant concepts such as monopolistic competition and the Monetarist Counterrevolution. This quiz will challenge your understanding of the evolution of economic thought.
