Questions for Review without Answers
Chapter 21. Price Theory. Functions and Behaviour of Prices. Value Theories
I. Basics
1) Distinguish absolute and relative prices.
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II. Functions of Prices
2) Explain why prices are the free-market counterpart of central planning.
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III. The Behaviour and Formation of Prices in Economic Theory
3) Please explain the major reasons for the perishability of goods in capitalist countries.
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4) What is the air example?
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5) List four reasons for sticky prices.
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IV. Price Formation in Economic Reality
6) What tells consumers that price formation is not controlled?
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7) What precisely is the trial-and-error process that is prevalent when prices are uncontrolled?
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8) Make a list of the goods and services you buy regularly and decide how their prices are formed.
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V. Modern Value Theory
9) Modern value theory offers three explanations of price. Please list them.
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10) What is the revolutionary aspect of modern value theory?
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11) Explain the paradox of value.
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VI. An Excursus on Pre-Modern Value Theory
12) Why did Aristotle think that making profits is "unsound and unnatural"?
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VII. An Excursus on the Relationship between Price Theory and Profit Theory
13) Marx said that profits are theft. What is stolen?
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14) What would neo-classical economists answer to the Marxian reproach?
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