Homework answers / question archive / 1) Scientific studies intended to explain empirical phenomena with mechanistic models that posit cause-and-effect relationships are based on a perspective known as: (a) determinism

1) Scientific studies intended to explain empirical phenomena with mechanistic models that posit cause-and-effect relationships are based on a perspective known as: (a) determinism

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1) Scientific studies intended to explain empirical phenomena with mechanistic models that posit cause-and-effect relationships are based on a perspective known as: (a) determinism. (b) metaphysics. (c) stochasticity. (d) predestination.

2) The Chinese writer Guan Zhong used his “light/heavy” theory to describe an early version of: (a) the law of comparative advantage. (b) the laws of supply and demand. (c) John Locke’s labor theory of value. (d) Malthusian theory of population growth.

3) John Locke and David Hume outlined an early version of the: (a) circular flow of income. (b) permanent income hypothesis. (c) quantity theory of money. (d) marginal disutility of poverty.

4) Positive scientific hypotheses would most logically include such statements as: (a) people who murder with premeditation should be executed. (b) a woman without a man is happier than a fish without a bicycle. (c) General Douglas Macarthur was the greatest military leader of the 20^th century. (d) the population of Madrid is 6,6 million.

5) Xenophon was roughly contemporary with Socrates. One of his books, in Greek, refers to efficiency at the level of the household and producer, and it is entitled: (a) Economics for Dummies. (b) Wealth of Nations. (c) Oeconomicus. (d) The Republic.

6) David Hume’s observations about the relationship between the money supply and the price level are known as the: (a) Natural Law. (b) Law of Comparative Advantage. (c) Law of Absolute Advantage. (d) None of the above.

7) Economic issues incapable of scientific verification as to correctness or falsity, such as why, when and how to prosecute and execute alleged murderers, or to whom income should be redistributed, falls into the category of: (a) normative economics. (b) negative economics. (c) neutral economics. (d) positive economics.

8) The concept of efficiency attributed to Vilfredo Pareto was apparently first anticipated in the writings of: (a) Ibn Khaldun. (b) Hesiod. (c) Thomas Mun. (d) Heraclites.

9) A laissez-faire government is limited to determining: (a) property rights in a simple fashion and to enforcing private contracts. (b) market prices that guarantee equitable resource allocations. (c) how resources will be allocated efficiently. (d) the money supply and providing a strong national defense.

10) Adam Smith would expect a student who just wrecked his parents’ car to worry more about the car accident than news of 3,000 deaths in a natural disater because of the individual’s: (a) apathy. (b) relative rationality. (c) self-interest. (d) sympathy.

11) According to Socrates, Plato, Aristotle and many of their early disciples: (a) only agriculture can enlarge the circular flow of income and expenditure. (b) morality, and not just impersonal market forces, should help determine the “just price” of a good. (c) the market system should be subject to administrative control to ensure distributive justice. (d) exports should be encouraged and imports discouraged.

12) Building blocks for a capitalist system would include: (a) abolition of private property rights. (b) interventionist policies. (c) market-determined prices and outputs. (d) distribution of income in accord with the principle, “From each, according to ability, to each, according to need.

13) Orthodox economic theory views all economic problems as based on: (a) greed. (b) scarcity. (c) unemployment. (d) governmental intervention.

14) From this list, the thinker whose ideas remain most highly influential in disciplines far beyond the realm of orthodox economics was: (a) Aristotle. (b) François Quesnay. (c) William Petty. (d) Adam Smith.

15) From the perspective of today’s academic standards, Adam Smith should have more clearly acknowledged that many of the insights and analyses for which he took credit in his Wealth of Nations had actually been gleaned from the writings of: (a) Aristotle. (b) Thomas Aquinas. (c) Richard Cantillon. (d) Sir Richard Petty.

16) A Greek philosopher who pondered the paradox of value, denounced interest payments because “money is barren,” and built foundations for the medieval scholastics’ doctrine of the “just price” was: (a) Protagoras. (b) Plato. (c) Aristotle. (d) Xenophon.

17) The person with, arguably, the best claim to the title “founder of modern economics” was: (a) William Pety. (b) David Hume. (c) Thomas Mun. (d) Adam Smith.

18) Medieval scholastics, early Islamic thinkers, and Aristotle all agreed that: (a) the accumulation of gold within a nation-state would eventually offset any trade surplus. (b) payments of interest [usury] should be prohibited. (c) commerce was modeled on a circular flow. (d) surpluses are enhanced through skilled management.

19) The Wealth of Nations, a pioneering survey of economic thought, was published in: (a) 1849, and written by Karl Marx. (b) 1936, and written by John Maynard Keynes. (c) 1776, and written by Adam Smith. (d) 1734, and written by Richard Cantillon.

20) An early philosopher who described development as a process whereby people move from a rural, nomadic society with little economic surplus to an agricultural society with greater economic surplus, facilitating population growth was the: (a) physiocrat François Quesnay, who asserted that land generates surplus net product. (b) Islamic cleric Ibn Khaldun, who condemned interest as usury. (c) medieval scholastic Thomas Aquinas, who developed the modern theory of overpopulation. (d) Chinese advisor to the Emperor Guan Zhong, who made a fortune speculating in grain.

21) Adam Smith wrote his Wealth of Nations in large part as a refutation of the doctrines of: (a) classical liberalism. (b) utilitarianism. (c) physiocracy. (d) mercantilism.

22) The group of economic theorists who emerged during the late 13^th century who were intent on reconciling the collapse of the feudal economic system with moral ideals based in religion were the: (a) French physiocrats. (b) mercantilists. (c) early Islamic economic thinkers. (d) medieval scholastics.

23) Adam Smith’s writings on the historical process of economic growth includes heavy reliance on: (a) autarchic states. (b) impratial spectator. (c) divisions of labor in production processes. (d) innovations developed by entrepreneurs.

24) Sets of thinkers who would most strongly have agreed with a statement that “charging interest on loans is unethical because money does not directly generate valuable physical output” would have included: (a) Epicurus, Xenophon and Hesiod. (b) Sir William Petty, Richard Cantillon, and Francois Quesnay. (c) Plato, Aristotle, early Islamic scholars, and medieval scholastics. (d) Jeremy Bentham, Adam Smith, and Thomas Malthus.

25) Adam Smith’s theory of economic growth relies upon a ________ to kick-start the process, and then _________ to continue it. (a) higher wages./ the wages fund. (b) division of labor/ higher wages. (c) explosive population growth / economies of scale. (d) division of labor / capital accumulation.

26) The concept of a “just price” that condemned market forces for yielding unjust results was developed in the writings of: (a) Antoine Augustin Cournot. (b) Fabius Maximus. (c) Karl Marx. (d) Thomas Aquinas.

27) Adam Smith’s famous reference to an “invisible hand” meant that: (a) unregulated market competition enhances economic welfare. (b) government should closely regulate monopolies. (c) pure competition is a divinely inspired market structure. (d) unpublicized conspirators dictate most government policies.

28) Mercantilist thought, circa 1500-1750, implicitly assumed that: (a) total wealth in the world is fixed. (b) economic wisdom derives from a proper reading of scripture. (c) free trade is the best way to maximize the wealth of a nation and trade is a win-win game. (d) excessive amounts of gold quickly trigger inflationary pressure.

29) Adam Smith’s economic system relies heavily on all the following concepts except: (a) market expansion will be facilitated by capital accumulation. (b) prices will be driven to the lowest point at which production can still meet consumer demand. (c) market expansion will be facilitated by individual innovation. (d) resources will not be wasted.

30) Most of the eighteenth century thinkers who developed the theory of mercantilism were: (a) warrior poets. (b) merchant businessman. (c) moral philosophers. (d) civil servants.

31) François Quesnay, working with other French physiocrats to build his Tableau Economique, believed that if the government followed “laissez-faire” ideals, then (a) government would collapse, (b) supply would outweigh demand. (c) the economy would be at equilibrium, (d) a natural order of society would emerge.

32) François Quesnay and other physiocrats argued that the ultimate source of all wealth was: (a) Labor – only through labor can value be added to a product. (b) Specie – a nation becomes wealthy through the accumulation of gold. (c) Manufacture – the only industry that produces more than the sum of its inputs. (d) None of the above.

33) Adam Smith and most of the classical economists who followed immediately in his footsteps: (a) viewed monopoly as no big problem. (b) encouraged monopolies because of their research and development capabilities. (c) thought monopoly power was a communist plot. (d) loathed monopolization and viewed it as largely government sponsored and a conspiracy to sink the wages of labor.

34) Adam Smith tended to favor laissez- faire economic policies. He also: (a) saw the need for some state intervention. (b) believed there were no conditions in which the government should intervene. (c) supported most government intervention to equalize income and wealth. (d) would have agreed with Bernard Mandeville about macroeconomic policy.