schools of thought

Question 1

4 disadvantages of Capitalism

Answer 1

1. unstable
2. winners vs losers
3. uneven resources allocation
4. exploits workers

Question 1

4 advantages of Capitalism

Answer 1

1. provides incentives
2. knowledge exchange
3. capital efficiency
4. development

Question 2

What is the aim of a Planned Economy?

Answer 2

that the government is the central actor distributing resources to promote economic wellbeing for an equitable society

Question 3

2 causes of Market Failures

Answer 3

1. Externalities: a third party being positively or negatively impacted
2. Market Power: 1 economic agent influences market prices

Question 4

2 uses of economic models

Answer 4

1. Predict future actions as a consequence of a decision
2. Simulating a situation to know what would have happened

Question 5

Schools of Thought
NeoClassical Economics

Answer 5

The market is the central feature in generating wellbeing
it assumes that
1. individuals act rationally
2. seek utility maximisation despite budget constraints
3. act on self-interest

x flawed assumptions

Question 6

Schools of Thought
Feminist Economics

Answer 6

Questions neoclassical’s assumptions
- argues that unpaid work should be considered

Question 7

Schools of Thought
Marxist Economics

Answer 7

Firms & markets are a collection of humans
1. power leads to exploitation
2. power dynamics are self destructive

Question 8

Schools of Thought
Austrian Economics

Answer 8

Promotes laissez-faire by looking at the supply rather than at the demand
1. Supply excess leads to recession which triggers inflation
2. Inflation is a symptom of imbalance

x it relies on narrative rather than mathematical analysis