ECON 307

In Class Exercise Fourteen - Mill

1.  Regarding method - Mill thought that economists should use both deductive and inductive reasoning.  He is famous for his use of ceteris paribus -- what does that mean and can you use it in a "problem?"

2.  What does "economic man" mean?  Can you critique the use of economic man in understanding economic phenomena?

3.  For Mill, the laws of production were ________________, and the laws of distribution were __________________.

4.  Did Mill agree with Say's law?  What interpretation?  What did Mill add to the circular flow diagram model of Say's law?

5.  Mill can be credited for discussing the theory that is now called "crowding out" - which provides a theory as to why government deficits are anti-productive.  What was Mill's theory?  What were his exceptions with respect to "crowding out" taking place?  How has the model been interpreted today (graphically)?

6.  Regarding economic growth -- he agreed with Ricardo that diminishing marginal returns to agriculture and declining investment in capital could cause problems.  But the "stationary state" was not necessarily a bad thing to Mill -- why?

7.  Regarding supply and demand -- what did Mill add to neoclassical theory?

8.  With respect to his normative economics -- what were Mill's main concerns for society?  Did he like inheritance?  Why or why not?

9.  What did he think about the importance of economic distribution vs. economic growth?

10.  Who was his wife and co-author?

11.  Any other questions on this material?