Ch. 1 | Intro (Sobel)

Question 1

autotarky

Answer 1

A policy that seeks complete isolation from the global economy; self-sufficiency

Question 2

Backward induction

Answer 2

The process of examining a decision in reverse, in order to try to understand the rational calculations that could lead to such a decision

Question 3

Causality

Answer 3

The direct connection between a cause and an effect; a relationship in which a change in input A brings about a change in outcome B

Question 4

Centralized means of allocation

Answer 4

Distribution mechanisms that are more hierarchical and authoritative than the voluntary, consensual nature of a market

Question 5

Closed-economy models

Answer 5

Approaches to the examination of economic conditions in a society by ignoring economic factors and conditions external to the nation and considering the nation as an isolated entity

Question 6

Completeness

Answer 6

The quality that defines two alternatives as both comparable and capable of being placed in a hierarchy

Question 7

Condorcet paradox

Answer 7

A situation in which a voting rule aggregates individual preferences that are complete and transitive, but produces a collective outcome that is intransitive

Question 8

Costs

Answer 8

The goods that we forgo when we choose to consume a particular item

Question 9

Data

Answer 9

Q

Question 10

Decentralized

Answer 10

QEconomic systems in which consumption, production, and allocation choices are voluntary, are determined by supply and demand, and are coordinated by a price mechanism

Question 11

Dependent variable

Answer 11

The phenomenon that social researchers are attempting to explain, a factor that is influenced or caused by an independent variable

Question 12

Dominant strategy

Answer 12

A strategy that a player would select regardless of the actions of other players

Question 13

Fallacy of composition

Answer 13

A strategic situation in which the outcome is different than simply the sum of the parts, either greater or less

Question 14

Game theory

Answer 14

The systematic study of rational choice in strategic settings

Question 15

Global capitalism

Answer 15

A particular form of social and economic relations connecting national economies, by which exchange across nations occurs primarily in markets, where consumption choices are voluntary, are determined by supply and demand, and are coordinated by a price mechanism

Question 16

Globalization

Answer 16

The processes by which people in one society become culturally, economically, politically, strategically, and ecologically closer to peoples in geographically distant societies

Question 17

Hierarchy of preferences

Answer 17

A ranking of preferences along a single dimension based upon self-interest—creating a hierarchy from most to least preferred

Question 18

Independent variable

Answer 18

Factors that, when changed, cause a shift in another factor

Question 19

Indifference

Answer 19

The state of impartiality, or lack of preference between alternatives that are equal but still comparable

Question 20

Institutions

Answer 20

The formal and informal “rules of the game,” laws, and practices that structure the incentives of individuals

Question 21

Intransitive collective outcome

Answer 21

A social preference ordering that does not produce a strict hierarchy of social preferences

Question 22

Invisible hand

Answer 22

An idea proposed by Adam Smith, theorizing that an unseen force guides self-interested individual behavior in competitive markets to promote the welfare of society without deliberate intent

Question 23

Methodological individualism

Answer 23

A claim that individuals—not larger units of aggregation such as nations or societies—make choices

Question 24

Models

Answer 24

A simplified intellectual construction that postulates a causal relationship across a set of variables, thus providing a tool for examining similarities across social behavior

Question 25

Nash equilibrium

Answer 25

A stable equilibrium in a social interaction whereby no actor can improve her payoff by unilaterally selecting another strategy

Question 26

Normative

Answer 26

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Question 27

Normative theory

Answer 27

A statement about how we want the world to work, what “ought to be”; see positive theory

Question 28

Open-economy models

Answer 28

Political economy models in which connections across national economies become important factors to consider when exploring a nation’s economic and social welfare and the politics that surrounds it

Question 29

Political economy

Answer 29

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Question 30

Positive theory

Answer 30

A model for how the world actually works, “what is,” rather than how we might want the world to function; see normative theory

Question 31

Positivists

Answer 31

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Question 32

Power

Answer 32

The tools, the means, to influence outcomes and achieve one’s own ends; the abil­ity to prevail and overcome obstacles

Question 33

Preferences

Answer 33

Statements about individual wants, possibly including material wants as well as social and spiritual wants

Question 34

Realism

Answer 34

The reliance of governments on their own means, rather than on international treaties and law; a self-help strategy for constructing public policies to address a world of what is, not a world of what ought to be

Question 35

Realpolitik

Answer 35

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Question 36

Scarcity

Answer 36

The concept that all items we consume—those produced by man and those pro­duced by nature—exist in some finite amount, regardless of the demand for those items; this is a key assumption, as it generates the conditions for competition, cooperation, and conflict over the distribution of resources and opportunities

Question 37

Self-interest

Answer 37

The notion that people make choices based upon their hierarchy of preferences and their budgetary constraints

Question 38

Social trap

Answer 38

A situation in which what appears to be an individual’s maximizing, self-interested choice for obtaining a preferred outcome results in a subpar outcome both for the individual and for the larger group or society; this unexpected outcome occurs because of the structure of interactions of the choices made by multiple individuals

Question 39

Sovereignty

Answer 39

The principle that the government of the state is the supreme legitimate authority within its territorial borders; in terms of international relations, it means that, theoretically, no state can exercise legitimate authority within another state’s boundaries

Question 40

Spatial model

Answer 40

A useful visual tool for examining the distribution of preferences

Question 41

Spurious

Answer 41

Q

Question 42

Stable equilibrium

Answer 42

Q

Question 43

Testable hypothesis

Answer 43

Assumptions about behavior that can be evaluated with information from the empirical world

Question 44

Transitivity

Answer 44

The quality that defines three or more alternatives as comparable and capable of being placed in a hierarchy of preference

Question 45

Validity

Answer 45

The accuracy of a model or claim