Class 2

Question 1

Liberal approach

Answer 1

o Take humans as they are
o assume that they are profit and wealth maximizer
o Free competition is the environment in which they do well
o Reveal preference: you only care what people do, not about what they say or what they think
o Operational rationality
o Humans are rational only in respective to utility maximization
o  Humans will behave unconsciously according to a program that can be mathematically formulated
o this only works if you have an environment: laissez faire and no outside intervention and free competition

Question 2

induction

Answer 2

o observation
o regularities
o formulate a hypothesis
o  from the particular to the general (Induction)

Question 3

deduction: testable prediction

Answer 3

(opposite of induction)

o to falsifiable or accept

Question 4

Karl Popper established 4 criteria:

Answer 4

• internal logical consistence
• absence of tautology
• scientific progress
• forth is missing

Question 5

Critics : Duhem and Quine

Answer 5

• You can never really falsify a theory, falsification doesn’t work
• You do the prediction in a controlled environment and it doesn’t work or doesn’t come true
•  You cannot reject the prediction if the prediction is not verified
• You only have to change the parameters of the experimental setup the theory might become true
•  Idea of infinite adaptation but not rejection
• A bundle of hypothesis as a whole can be tested against the empirical world

Question 6

parameters of economics behind

Answer 6

not controllable.
o Parameters on the demand side: income, preferences
o Parameters on the supply side : technology, degree of competition, government policy

Question 7

Ethics, Religion and Economy in Antiquity And The Middle Ages

Answer 7

• Beginning with Sokrates
• Plato was the student of Sokrates
• Plato was the teacher of Aristotle
• Aristotle was the teacher of Alexander the Great

Question 8

Plato, 427-347 :

Answer 8

• The Republic as ideal – Politeia, der Idealstaat der Philosophenherrscher (1st best)
• The Laws – 2nd best
  o Tyrant
  o Magistrats / philosophers
  o Guardians or warriors
  o Artisans
  o Slaves (prisoners of war)
• He wants a pure society, and it is not about getting rich and there is no private property  u-topien society
• U-tope:
  o 1.) no private property
  o 2.) abolition of family
  unrestricted power –> selfishness –> will ruin itself and the state
  Laws as the second best solution

Question 9

ou – topos 

Answer 9

non-place = Utopie

Question 10

eu – topos 

Answer 10

good place = Eutopie