History of Economics

Question 1

what type of science is economics?

Answer 1

social

Question 2

is economics the youngest or oldest of all formal social sciences?

Answer 2

youngest

Question 3

what year did the concept begin and where did it come from?

Answer 3

1776, wealth of nations (Adam Smith)

Question 4

what is economics closely related to?

Answer 4

philosophy, ethics, politics, and psychology

Question 5

homo economicus

Answer 5

economic man/person

Question 6

homo politicus

Answer 6

political man/person

Question 7

homo philosophicus

Answer 7

philosophical man/person

Question 8

what book did Xenophon write?

Answer 8

oikonomos (household/home, laws/norms)

Question 9

what are the classical virtues of economics?

Answer 9

justice (have I paid my dues?), fortitude (courage), prudence (wisdom), temperance (control)

Question 10

what cities do we know history from?

Answer 10

athens, rome, london, jerusalem, philadelphia

Question 11

what history came from athens?

Answer 11

philosophy, politics, psychology

Question 12

what history came from rome?

Answer 12

english, law

Question 13

what history came from london?

Answer 13

economics, politics

Question 14

what history came from jerusalem?

Answer 14

monotheism idea in religion

Question 15

what history came from philadelphia?

Answer 15

america beginnings (think american revolution)

Question 16

what is the fundamental problem, in general?

Answer 16

individual human beings have unlimited number of ends, desires, goals…, means (resources) to attain our end are relatively scarce in comparison (all decisions are made on the margin) (think extra or additional)

Question 17

what are the means of resources?

Answer 17

land, labor, capital, entrepreneurship

Question 18

what is land?

Answer 18

all the gifts of nature/god; origin resource, income=rent

Question 19

what is labor?

Answer 19

human effort in production, income=wages

Question 20

what is capital?

Answer 20

man-made tools, machines (makes lives easiers), income=interest

Question 21

what is entrepreneurship?

Answer 21

idea people, problem solvers, risk takers, income=profit

Question 22

what is the fundamental problem in terms of resources?

Answer 22

land and labor collide, compelling individuals to choose between ends, sacrificing the next best thing (scarcity–> choice–> sacrifice) (opportunity cost)

Question 23

production possibility curve involves what?

Answer 23

some resources (ex. 100 laborers), some knowledge of resources (ex. skills), full employment of resources (some maximum productive power of society)

Question 24

what is the law of increasing opportunity costs?

Answer 24

as society desires to produce more of a good it must sacrifice greater and greater amounts of other goods to do so

Question 25

what is the rationale behind the law of increasing opportunity costs?

Answer 25

resources are not easily adaptable to alternate uses (ex. doctors building roads story)

Question 26

what is international trade?

Answer 26

specialize in product, other country over produces product, your country trades with other country (costs can become too high (refer to law of increasing opportunity costs))

Question 27

how is a depression declaired?

Answer 27

negative economic event of economy GDP has shrunk 2 quarters in a row

Question 28

what is efficiency?

Answer 28

economic growth, pushing production possibility rightward

Question 29

how do you increase efficiency?

Answer 29

savings-->investments (help future, human/physical capital, causes economic growth)

Question 30

what causes economic collapse/decline?

Answer 30

natural/human catastrophe, war (particularly for the loser(s)), capital consumption (country consuming own resources, causes socialism and inflation)

Question 31

what are the key points to the broken window fallacy?

Answer 31

what is seen vs. not seen (economic fallacies: untruth v. half truth), particular interest v. benefit of all, and short-run v. long-run

Question 32

what is the broken window fallacy?

Answer 32

baker had a window, was saving for a new suit. kid breaks window. people only see surface (new window). money was spent on window instead of new suit. does not help economy at all. tailor lost business. baker could have had the same window and a new suit at the same time. destruction steers you into a different direction (no benefit)

Question 33

"ones ability to consume is predicted on one's ability to produce" is from who?

Answer 33

jean-baptiste