Study Questions For The First Quiz

ECON 307

These questions are not designed to take the place of studying your notes and the reading assignments.  Do not e-mail me and ask me to answer all or some of these questions for you.  If you have missed class, it is your responsibility to get the notes from another student.  Once you have answered these questions yourself, if you are unsure of any of your answers, let me know and I will tell you if you are correct or not.  Don't be afraid to ask me questions, I just want you to try to answer the questions yourself first.

Topic:  Introduction

1. We discussed several reasons why we should study the evolution of economic thought.  What are they?  Do you support or disagree with them?  Why?

2. Is economics a settled body of thought?  Explain.

3. Economics is a social science.  Why?

4. Most early economists (really up until the late 1800s) were not concerned with the method they used to come up with theories.  Instead, how and why did they "invent" their theories?

5. Compare and contrast the understanding of the history of economic ideas with respect to:  a) relativist vs. absolutist, b) Whig vs. anti-Whig, c) do ideas matter:  yes or no, d) government vs. voluntary forces.

6. Tyler Cowen's video we saw in class discussed some reasons as to why economic thought has been slow to develop.  What were they and which one would you support and why?

Topic:  Early Economic Thought - Aristotle

1. What three basic things can we say about early economic thought?

2. What do you think Aristotle meant in terms of "equality" in trade?

3. Explain how Aristotle related demand, money, commensurability, equality, exchange, and association.  What do all of these mean?

4. Aristotle seemed to understand all three of the common functions of money we recognize today.  What are they and which one did he emphasize (this relates to the above question).

Topic:  Early Economic Thought - Early Muslim Thought

1. How did the Medieval Muslim scholars view economic planning by the state?  Private property?

2. What was Ibn Khaldun's theory regarding productivity and labor?

3. What was Khaldun's reasons behind the differences in labor earnings?

4. Khaldun said that an increase in income in the economy will increase expenditures.  How would you interpret this if you were to say that he was a precursor to Say?  How would you interpret this if you were to say he was a precursor to Keynes?

5. Explain derived demand - as Khaldun seemed to understand.

6. How does Khaldun's theory of taxes relate to modern day "supply side economics"?

Topic:  Early Economic Thought - The Scholastics

1. The Scholastics and others saw economics as part of a natural order.  What did they basically mean by that?

2. The Scholastics were concerned with the general interest -- why can this be considered an early form of "welfare" economics?

3. What is the "principle of plentide"?

4. What was the "paradox of value" St. Thomas Aquinas faced (the mouse vs. the pearl)?

5. According to St. Thomas Aquinas usury is unjust.  Why?

Topic:  Mercantilism (We will see how far we get with this topic before the first quiz)

1. An important philosophical background to mercantilism was the idea that the total volume of wealth available for all countries was a more or less fixed magnitude -- a zero sum game.  How does this proposition fit with mercantilist policy?

2. There are two approaches to defining mercantilism -- explain both.

3. What are the rules or ideas of mercantilism (per von Hornick)?  Make sure you understand them.  What was the main objective?  How was wealth (for a county) defined? 

4. Describe how von Hornick's rules worked together to meet his goals?  For example, why did he think keeping gold and silver in a country and not allowing imports of finished goods would increase population?  Or why did he think that only unfinished goods should be imported (if necessary)?

5. What policy implications follow from Mercantilism's ideas?

6. What does a "favorable balance of trade" mean under Mercantilism?

7. Why are both Mun and Hume seen as precursors to the quantity theory of money (and what is this theory)?

8. Hume said that money was not wealth to a country - it was a "go-between" in exchange.  Make sure you understand this.

9. Explain Hume's specie flow mechanism.  What was Hume trying to demonstrate with this theory?