Questions for Review without Answers
Chapter 2. Its Subject I. Scientific Status. Subjects of Investigation. Subdivisions. Models
I. The Discipline's Name
1) What do oikonomia and oikumene mean?
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2) What is the difference between economics and political economy?
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II. Its Status as a Science
3) Explain what a scatter diagram is.
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4) Explain Popper's falsifiability criterion.
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5) Explain the difference between normative and positive statements.
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6) Comment on Hume's dictum "There is no way from is to ought".
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7) Economic efficiency is maximum output. Is this a positive or a normative statement?
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8) "All swans are white." This is the classic example of a theory that can be falsified. Explain why.
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9) "Man is a selfish maximiser of utility." Can this theory also be falsified? If so, how?
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10) What is the essence of scientific models?
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11) Why is economics a social science?
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III. Definitions of Its Subject
12) Repeat the standard definition of economics (the one with the allocation of resources).
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13) What is meant by the allocation of resources?
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14) What are the three basic economic questions that any economy must answer?
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15) How do capitalist systems answer the three basic questions?
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16) Draw the PPF and explain why it illustrates "the management of scarce resources that have alternative uses".
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17) Explain how the PPF illustrates costs and growth.
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18) Define productive efficiency.
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IV. Subdivisions
19) Explain what microeconomics and macroeconomics deal with.
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20) Give a definition of economics that comprises both microeconomics and macroeconomics.
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21) What are micro foundations of macroeconomics? Give an example.
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22) Draw a circular-flow diagram and explain how it illustrates the transactions between microeconomic agents.
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23) What do econometricians do?
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24) Explain how econometric models are built.
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25) What do economists mean by development?
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26) Explain the term convergence.
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V. Two Schools of Economic Thought and Their Models
27) What are the most important elements of the standard micro model?
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28) Please outline the essence of new Keynesianism and neo-liberalism.
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29) Explain where the leakage in the circular flow that Keynes detected occurs.
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30) List today's major macro issues.
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VI. Economists and the Government
31) On which government responsibilities are all economists agreed?
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32) Which government interventions are most controversial?
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VII. Economics and Capitalism
33) Distinguish free-enterprise economies, free-market economies and capitalist economies.
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34) What are the hallmarks of Anglo-Saxon capitalism?
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VIII. An Excursus on Pre-Capitalist Economic Systems
35) What are the major differences between a feudal order and a capitalist system?
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36) What are the major differences between the medieval guilds and today's trade unions?
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37) What is today's equivalent of mercantilism?
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