Neo-classical school

Question 1

School main ideas

Answer 1

1. consider both demand and supply in the determination of the
   price
2. attach more value to role of money
3. extended marginal analysis to different market structures

Question 2

Marshall

Answer 2

1. D=S
2. Time perspective on D and S
3. Ceteris Paribus
4. Rational consumer choice - marginal utility
5. Social surplus
6. PED, Originator of externalities, income distribution

Question 3

Wicksell

Answer 3

1. Role of the interest rates in price determination
2. Normal/natural interest rate vs. bank interest rate
3. Advocate of stabilizing monetary policy: As long as prices remain unchanged,
   bank rate should be unchanged. When prices rise, the bank rate should rise. When
   prices fall, the bank rate should fall

Question 4

Fisher

Answer 4

1. IR influenced by impatience rate & investment opportunity rate
2. the Fisher effect: theory of economics that describes the relationship
   between the real and nominal interest rates and the rate of inflation.
3. Changes in M disturb the optimum, make people adjust their cash/expenditure
   ratio, and as such changes prices
4. Monetary policy: control quantity of money as to face business cycle
   fluctuations.

Question 5

Robinson & Chmaberlin

Answer 5

1. Product differentiation, competition from close substitutes, Free entry, no long-run profits, Mixture between pure competition and pure monopoly ( imperfect comp)
2. Robinson - No discussion on advertising/product development, More attention to consequences for price formation:
   - Price discrimination & monopsony