Econ 434: History of Economic Doctrines

Questions from Previous Versions of Exam One

Section 1: Multiple Choice.

1. The “history of economic doctrines” is a subset of the broader academic discipline sometimes classified as among “the humanities” and which is known as: (a) macroeconomic theory. (b) cultural relativism. (c) intellectual history. (d) institutional theory. (e) military history.

2. One prominent economic theorist who originally trained as an engineer is also famous as a sociologist, in part for formulating the 80-20 rule, one version of which is: Twenty percent of the people do eighty percent of the work, and will acquire eighty percent of all income and/or wealth regardless of the economic or social system in which they live. This famous thinker was: (a) Thomas Robert Malthus. (b) Karl Marx. (c) Richard Cantillon. (d) Vilfredo Pareto. (e) Simon Newcomb.

3. Some basic behavioral assumptions imbedded in standard economic theory are disputed by cognitive psychologists and modern behavioral economists, most of whom would characterize human behavior as strongly influenced by: (a) ingrained habits shaped by institutions that differ across cultures. (b) limits on rationality, self interest, and willpower. (c) a narrow focus on self interest. (d) “the selfish gene,” which yields needs to propagate our species.

4. Foundations for the “supply-side” cost-based theory of pricing that dominated economic theory in England from roughly 1750 until 1870 or so, and which denied much of a role for factors influencing demand, were found in pioneering writings about the: (a) circular flow of income authored by François Quesnay. (b) value of money written by various mercantilists including Sir William Petty. (c) wealth of nations authored by Richard Cantillon. (d) labor theory of value authored by John Locke. (e) nature of “just prices” as described by Albertus Magnus and Thomas Aquinas.

5. The behavioral scientist most likely to have written the sentence “Classic economic theory, based as it is on an inadequate theory of human motivation, could be revolutionized by accepting the reality of higher human needs, including the impulse to self-actualization and the love for the highest values,” was: (a) Francis Galton. (b) Franz Boaz. (c) Margaret Meade. (d) Sigmund Freud. (e) Abraham Maslow.

6. The degree of inequality in the distributions of income or wealth across the population can be illustrated graphically with a: (a) Laffer curve. (b) Lorenz curve. (c) Pareto curve. (d) welfare diagram.

7. Sociobiology is the notion that much of the behavior of all sentient living things is ultimately intended to propagate their gene pools. The sub-group of behavioral science most closely related to sociobiology is: (a) developmental psychology. (b) scientology. (c) evolutionary psychology. (d) behavioral economics. (e) Darwinian biology.

8. The process of “social homeostasis” hypothesized by the sociologist Talcott Parsons is a mechanism that implicitly underpins a theory of the distribution of income advanced earlier by: (a) John Stuart Mill. (b) Vilfredo Pareto. (c) David Ricardo. (d) John Bates Clark. (e) Karl Marx.

9. The Greek philosopher Plato advocated infanticide as a socially desirable mechanism for dealing with children born with severe birth defects. In this belief Plato was most like more modern: (a) evolutionary psychologists. (b) eugenicists. (c) libertarians. (d) vegetarians. (e) paleontologists. (f) socio-biologists.

10. An early Greek theorist first applied the term “oeconomicus” to the subject of economics and had, as a military leader, pondered difficulties in extricating his army from a war in what is now Iraq. He was also the first thinker to discuss the gains from a division of labor, and his name was: (a) Paracelsus. (b) Xenophon. (c) Oedipus Rex. (d) Plato. (e) Protagoras.

11. The Normans led by William the Conqueror occupied the British Isles after defeating England’s King Harald at the Battle of Hastings [1066 AD]. Suppose, instead, that King Harald had soundly defeated and permanently squelched the Norman invasion. The philosopher whose theories about social and scientific processes affectively asserted that the world today would be, at most, insignificantly different, was: (a) Adam Smith. (b) Zeno. (c) Thomas Aquinas. (d) Albert Einstein. (e) Protagoras.

12. Inconsistencies between market prices and the concept Richard Cantillon called “intrinsic value” was the key issue addressed in: (a) Karl Marx’s refinement of the John Locke’s labor theory of value. (b) Aristotle’s “diamond-water” paradox. (c) the Austrian emphasis on the subjective nature of value. (d) the speculations of Albertus Magnus and Thomas Aquinas about differences between value in use and value in exchange. (e) debates between Thomas Malthus and David Ricardo over the merits of the British “corn laws.”

13. Robert Frank conducted a prisoners’ dilemma experiment on three separate groups: [1] college students who had never taken any economics. [2] students who had taken one economics course. [3] graduate students in economics. His surprising results may be interpreted as evidence that: (a) studying economics causes many people to become more cynical about other people’s motives. (b) greedy behavior facilitates technological innovations. (c) individuals are as rational as economists assume. (d) markets never achieve equilibrium.

14. The pair of thinkers whose thoughts about government are least consistent with the sociological theories of the other pairs of thinkers listed would be: (a) Plato and Aristotle. (b) Roberto Michels and Vilfredo Pareto. (c) Friedrich Nietzsche and Gaetano Mosca. (d) Richard Cantillon and Adam Smith. (e) Adolf Hitler and Joseph Stalin.

15. Of the following, the thinkers who viewed markets most favorably and who would consequently have been least likely to condemn payments of interest as immoral or unjustified by productivity would have been: (a) Richard Cantillon and François Quesnay. (b) Aristotle and Plato. (c) Thomas Aquinas and Albertus Magnus. (d) Ibn Khaldun and Abu Hamid al-Ghazali.

16. The terms “paradigm” or “intellectual gestalt” that underpin a theory refer to the: (a) generation in which the thinker wrote. (b) education of the thinker. (c) framework of ideas shared among a group of thinkers who use similar techniques and worldviews to attack problems. (d) geographical region from which the theory first emerged. (e) point of development as compared to the chain of biological development.

17. The notion that property rights are not inherently "inalienable" because they are most directly determined by law (Leviathan or social consensus), is most consistent with the theories of (a) John Rawls and Robert Nozick. (b) Hugo Grotius and Thomas Hobbes. (c) Karl Marx and Friedrich Engels. (d) David Ricardo and Thomas Malthus. (e) John Locke, François Quesnay, and Thomas Jefferson.

18. Not among reasons why Thomas Robert Malthus’ forecasts about the ultimate prosperity or poverty of humankind proved too pessimistic would be because he underestimated the: (a) rate at which medical advances would prolong average human longevity. (b) decisionmaking power of women as they gained economic clout as workers. (c) effectiveness of birth control in controlling population. (d) rate of technological advance.

19. The industrial revolution and the transformation of the feudal economy in England into more of a market oriented economy occurred in part because of the flow of labor from rural to urban locations. This flow was largely a result of: (a) the flat tax movement. (b) standardization of money. (c) the enclosure movement. (d) the Protestant Reformation. (e) publication of the Wealth of Nations.

20. The cliché that “the punishment should fit the crime” originated in the philosophic writings of: (a) Plato. (b) Thomas Aquinas. (c) Jeremy Bentham. (d) David Hume. (e) Thomas Hobbes.

21. The economic philosopher whose theories were most consistent with Reverend Thomas Robert Malthus’ grim predictions about the human prospect would have been: (a) Jeremy Bentham. (b) Francois Quesnay. (c) Adam Smith. (d) Thomas Aquinas. (e) David Ricardo.

22. The theory of pricing for individual goods described in Adam Smith’s Wealth of Nations is most consistent with: (a) mercantilist doctrine. (b) Richard Cantillon’s distinction between “value in exchange” and his subjective “value in use.” (c) John Locke’s labor theory of value. (d) David Hume’s “specie-flow” mechanism. (e) Aristotle’s “diamond-water” paradox.

23. After the Spanish discovered the new world, they promptly began to plunder it. They imported large amount of gold and silver to Spain. This inflow of bullion caused prices to rise rapidly, which would have grave consequences for Spain. This rapid increase in the money supply made it cheaper for the Spanish to import goods from England and France, eventually causing: (a) the productive capacity of Spain to develop more slowly than capacity grew in England and France. (b) Spain to outpace other European nation in terms of production technology. (c) Spain to recognize the flaws of mercantilism more rapidly than occurred elsewhere in Europe. (d) Spanish export prices to fall relative to imports.

24. Of the following, the thinker least concerned with important aspects of agricultural productivity or the value of land or strong preferences for living in the pastoral boondocks as opposed to being an urban dweller was: (a) Thomas Jefferson. (b) François Quesnay. (c) David Ricardo. (d) Alexander Hamilton.

25. A top-down system of social and economic organization was most notably and strongly advocated by: (a) Leo Tolstoy, William Godwin, and Mikhail Bakunin. (b) John Stuart Mill, in his famous work, On Liberty. (c) David Ricardo, whose writings on government spending and taxes have been summarized as “Ricardian Equivalence.” (d) Plato, in The Republic. (e) Adam Smith, in The Wealth of Nations.

26. The Tableau Économique was developed by: (a) Pierre le Pesant de Boisguillebert (1646-1714) to trace the workings of the supply and demand to determine market prices. (b) Richard Cantillon and is a defense of entrepreneurial profit. (c) mercantilists to explain the advantages to a country of exporting more than it imported. (d) François Quesnay and is the basis for the modern circular flow model. (e) Sir William Petty to highlight the working of a monetary system based on gold.

27. The policies of England attacked by David Ricardo and defended by Thomas Robert Malthus were (a) “Corn Laws” that protected British agricultural interests from lower cost imported food. (b) the gold standard as a foundation for the money supply. (c) mercantilist conquests of less developed territories to establish colonies. (d) the enclosure movement. (e) birth control as a device to limit population.

28. The concept that economic inefficiency exists whenever anyone can be made better off without reducing the welfare of some other person was first made expressed in a mathematically formal way by: (a) Vilfredo Pareto. (b) Ibn Khaldun. (c) the Chinese thinker Guan Zhong. (d) Jules Dupuit. (e) William Petty.

29. Of the following, the two theorists most renowned for their expertise in medicine long before they began to formally contemplate economic concepts were: (a) David Hume and John Locke. (b) Adam Smith and Richard Cantillon. (c) Vilfredo Pareto and Leon Walras. (d) Hugo Grotius and Thomas Hobbes. (e) William Petty and François Quesnay.

30. Early in the eighteenth century, a leading industrialist responded to an advisor of France’s King Louis IV, who asked how the crown could best facilitate the world of commerce, with “Laissez nous faire,” which means: (a) “let justice be done, though the heavens fall.” (b) “leave us alone.” (c) “cut taxes to be fair.” (d) “eliminate the welfare system.” (e) “let us eat cake.”

31. Reliance on faith and authority to find answers to most philosophical questions is the engine of inquiry used in: (a) econometric theory. (b) logical positivism. (c) pragmatic empiricism. (d) inductive reasoning. (e) the scholastic method.

32. According to the laissez-faire philosophy of government, the: (a) economy works best when all investment decisions are centralized. (b) market system works best with only minimal government intervention. (c) government should be limited to stabilizing macroeconomic activity. (d) efficiency of socialism depends on government regulation. (e) market system is efficient if government controls the money supply.

33. “Laplace’s demon” [named after Pierre-Simon, Marquis de Laplace [1749-1827], also sometimes known as “Maxwell’s demon”] addresses the possibility that if a demon fully understood the laws of physics and knew the position of every particle in the universe at any given point in time, that “nothing could be uncertain and the future just like the past would be present before its [the demon’s] eyes." This theory of the universe is known as: (a) hysterisis. (b) path dependence. (c) astrology. (d) phenomenology. (e) determinism. (f) spiritualism. (g) secular atheism.

34. The economic writings of Richard Cantillon and Adam Smith differed most substantially in Cantillon’s significantly greater emphasis on the ideas that: (a) government decisionmaking and the resulting monopolization of markets tend to generate corruption and inefficiency. (b) competition drives prices down to the lowest level at which production can accommodate consumer desires for goods. (c) demand is an important determinant of market prices, and market expansion is facilitated when entrepreneurs accumulate capital and innovate new technology. (d) the government should balance its budget and resource allocation is more efficient if private individuals make economic decisions.

35. The argument that mercantilist policies about international trade fail to maximize the Wealth of Nations, as hinted at in the title of Adam Smith’s masterpiece, originated in the writings of: (a) John Locke about the labor theory of value. (b) David Hume about the specie-price mechanism. (c) Plato, about advantages derived from being ruled by a philosopher king. (d) David Ricardo, about the law of comparative advantage. (e) William Petty, about the need to develop figures to trace changes in national income accounts and imbalances of international payments.

36. David Ricardo’s theory of wage determination: (a) is all of the below. (b) based on his formulation of an “Iron Law of Wages.” (c) concludes that the wage rate [w] is inversely proportional to the amount of labor supplied. (d) relies heavily on Malthusian population theory in the long run. (e) concludes that, in the long run, the wage rate [w] is inversely proportional to population. (f) can be graphed as a rectangular hyperbola, with labor on the horizontal axis, and wage rates on the vertical axis, so that the amount of labor supplied rigidly determines that wage rate.

37. The thinkers whose theories are least consistent with the notion that most economic decisions should or inevitably will be “top down” [i.e., made by government, the church, or some other elite individual or group] would be: (a) the Italian social theorists Roberto Michels [“Iron Law of Oligarchy”] and Gaetano Mosca. (b) the Irish economic pioneer Richard Cantillon and the Scottish philosopher Adam Smith. (c) the Italian economist-sociologist Vilfredo Pareto. (d) the German philosopher Friedrich Nietzsche, who described a “will to power,” and the medieval scholastic Thomas Aquinas, who viewed the Bible as authoritative. (e) the Greek philosophers Plato and Aristotle.

38. The disruptions to labor markets in relatively well developed countries caused by the “outsourcing” of relatively low-wage jobs that accompany growing imports of low-cost labor-intensive goods from less developed countries most closely resembles the: (a) migration from agricultural to industrial occupations as farming shrank in importance as a source of income in the United States over the past 250 years. (b) violent overthrow of Russia’s Czars by communist Bolsheviks in 1917. (c) conquest of Mexico by conquistadores following Columbus’s “discovery” of “the New World.” (d) transition from nomadic hunter-gatherer societies to agricultural communities at the dawn of written history. (e) growth in national income and production precipitated by a wave of technological progress that followed electrification. (f) self-defeating nature of the attempts by Spain to become wealthier and more powerful by importing gold from “the new world” in the sixteenth century.

39. According to Karl Marx, the fundamental reason capitalism is morally reprehensible is because: (a) free trade does not allow citizens of the country to compete with foreign producers as effectively. (b) individual workers are exploited because they do not derive the full value of their labor. (c) the government should not be allowed to tax less wealthy individuals as much as wealthier individuals. (d) people cannot actively participate in the government. (e) free trade exploits human greed and thus should be regulated.

40. The moral philosopher who, in a 1759 publication, opined that many people would gladly sacrifice enjoyment of personal material pleasures if that sacrifice bettered the circumstances of people near and dear to them and with whom they empathized was: (a) Hugo Grotius. (b) Adam Smith. (c) Sir William Petty. (d) Richard Cantillon. (e) François Quesnay.

41. Relative to the analyses of most other notable economic theorists, treatments of economic concepts by Aristotle, Ibn Khaldun, Abu-Hamid al Ghazali, Albertus Magnus, and Thomas Aquinas are distinguished by their emphasis on: (a) the subjective nature of prices in a market system. (b) moral and ethical aspects of economic activity. (c) formal models based in pure logic. (d) the will of God operating through the concept Adam Smith later called “the invisible hand.”

42. The idea that the price of a produced good reflects, not the labor embodied in it, but rather the subjective usefulness of the last unit purchased is based on the concept of: (a) excess demand. (b) marginal productivity. (c) marginal utility. (d) the wages-fund. (e) decreasing costs.

43. Adam Smith should have emphasized more strongly how his Wealth of Nations drew ideas and inspiration from Richard Cantillon’s Essai. From today’s perspective, the Wealth of Nations would seem even more profound if Smith had also borrowed Cantillon’s insights into: (a) Aggregate Demand as a determinant of national income, and relative productivity as the basis for international trade. (b) representative government and market capitalism as foundations for democracy. (c) decisions at the margin, and the irrelevance of fixed costs for rational decisionmaking. (d) saving and investment as critical for capital formation and economic growth. (e) subjective aspects of pricing and the economic role of the entrepreneur.

44. The theory that dialectical processes [thesis + antithesis à synthesis] yield increased understanding about how the world works was first exposited by: (a) Aristotle. (b) Georg Hegel. (c) Karl Marx. (d) Isaac Newton. (e) Adam Smith. (f) David Ricardo. (g) Friedrich Engels. (h) John Stuart Mill. (i) David Hume. (j) Ludwig Feurbach. (k) John Locke.

45. Jeremy Bentham argued that “crime should be punished proportionally to the harm done to society, without consideration of motive, intent or remorse.” Bentham’s proposal would result in more than the optimal amount of crime because of the: (a) harmful effects of crime on the distribution of income according to the contribution standard. (b) unavailability of prisons in the late eighteenth century. (c) inequality in the distribution of income that characterized the early stages of the industrial revolution (d) probability of punishment being less than 100%. (e) relative ease with which white collar criminals can disguise the social costs of fraud and embezzlement.

46. In The Nature of Scientific Revolutions, Thomas Kuhn hypothesized that, for long periods in history: (a) practitioners of such “hard” sciences as math, chemistry or physics have had a much more powerful analytical framework [paradigm] than have such “soft” scientists as historians, economists, or psychologists. (b) most scientists accept a fairly static “paradigm” that limits focus, and that explosive growth in human knowledge follows adoption of a new paradigm that departs radically from the older paradigm. (c) scientific understanding has improved linearly. (d) scientific advances are proportional to the sophistication of quantitative techniques. (e) the most creative scientists have been atheists.
47. The evolution of classical economics to neoclassical economic analysis hinged primarily on (a) introducing calculus into analysis, which facilitated consideration of the effect of marginal units. (b) moving from the labor theory of value towards an assumption that all values are determined in an exclusively subjective manner. (c) a shift from partial equilibrium analysis to general equilibrium analysis. (d) considering industrial products in addition to agricultural products.
48. Thomas Robert Malthus’s conclusions about long run equilibrium for the mass of humankind echo the words of: (a) Thomas Hobbes that “life … [will be] … ‘nasty, brutish, and short’.” (b) John Locke that “labor is the ultimate source of all value.” (c) an anonymous Frenchman who responded with “laissez nous faire” when asked a question by King Louis XIV. (d) Charles Darwin about “survival of the fittest.” (e) medieval scholastics that our fate is ultimately in the hands of God.
49. Discussions of the gains associated with the division of labor are famously incorporated into Adam Smith’s Wealth of Nations, but this notion was expressed in writing first by: (a) Abu Hamid al-Ghazali. (b) Thomas Aquinas. (c) Zeno. (d) Demosthenes. (e) Aristotle. (f) Albertus Magnus. (g) Georg Hegel. (h) Xenophon. (i) Ibn Khaldun.
50. Marx predicted that, over time: (a) capital would become increasingly concentrated. (b) over-consumption would cause declining rates of profits. (c) revolutions would occur first in the less-developed countries. (d) socialist and capitalist economies would peacefully converge.

51. The theory of duopoly developed by A. A. Cournot was a precursor of modern: (a) game theory. (b) systems analysis. (c) econometrics. (d) optimal portfolio analysis. (e) structure-conduct-performance paradigms.

52. Advocates of shrinking, minimizing, or in some cases, eliminating the size and scope of government would include: (a) national socialists and fascists. (b) 19^th Century economic liberals, anarchists, syndicalists, libertarians. (c) Buddhists, Hindus, and Islamics. (d) Christian, Fabian, and Utopian socialists. (e) pre-revolutionary Marxists and liberation theologians.

53. Roberto Michels’ “Iron Law of Oligarchy” suggests that if the political leaders of the world’s 50 most populous democracies, the leaders of the world’s 50 largest unions, and the CEOs of the world’s 50 largest multinational companies were all given personality tests: (a) the political leaders, on average, would be the best educated and most knowledgeable. (b) they would all have more in common with each other than they would with the people they lead. (c) the business leaders would tend to be most knowledgeable about economics. (d) the union leaders and business leaders would be more like each other than the political leaders, who would tend to span a large variety of different personality types.

54. The powerful transformative effects of the spread of the market system in the process we now call globalization were most accurately predicted and vividly described by: (a) Adam Smith and Thomas Malthus. (b) Richard Cantillon and Sir William Petty. (c) Karl Marx and Friedrich Engels. (d) Bernard de Mandeville and Philipp Wilhelm von Hornick. (e) Ibn Khaldun and Abu Hamid al-Ghazali
55. Charles Darwin’s theory of evolution was most heavily influenced by: (a) Adam Smith’s concept of “the invisible hand.” (b) Thomas Malthus’s theory that population growth creates pressure that causes people to live a razor’s edge existence. (c) Jeremy Bentham’s advocacy of capital punishment to reduce serious crime. (d) David Hume’s early version of the Quantity Theory of Money. (e) Isaac Newton’s Second Law of Thermodynamics.
56. Antoine Augustin Cournot applied the equimarginal principle to illustrate why profit maximization requires: (a) MR = MC. (b) MPPk = MPPL = w = r. (c) charging desperate buyers the highest price possible. (d) MR = ATC. (e) P = MR.

57. Rejecting ex post “equality of results” as an ideal that would fail to provide incentives for productive work, John Stuart Mill advocated ex ante “equality of opportunity” and favored limits on the: (a) amounts of inheritance, gifts, or other bequests to heirs. (b) compensation of corporate executives. (c) employment of close relatives by high level government officials. (d) profits of business firms. (e) sizes of the mansions of the wealthy elite.

58. The eighteenth-century essayist and philosopher roundly condemned by sectarian authorities for asserting that humans are hardwired to enjoy worldly pleasures instead of being on Earth solely to do the bidding of God was: (a) Bernard de Mandeville. (b) Hugo Grotius. (c) Pierre de Pesant Boisguillebert. (d) Philipp Wilhelm von Hornick. (e) Richard Cantillon.

59. In the middle of the nineteenth century, politics in Great Britain was dominated by the Liberal and the Conservative Parties. The Liberal Party was subsequently displaced as a major force in British politics by the Labour Party, which was an outgrowth of the group known as: (a) Fabian socialists. (b) anarcho-syndicalists. (c) conservative Marxists. (d) Christian socialists. (e) Utopians.

60. The Marxist term for differences between wages and labor's average marginal productivity is: (a) wage deficit. (b) surplus value. (c) exploitation quotient. (d) monopoly profit. (e) contingency fee.

61. In accord with the economic analysis of A. Jules E. Dupuit , the marginal social cost of either legal or illegal file sharing (e.g., downloading a song from the internet) is equal to: (a) the marginal revenue that would have otherwise been received by the artist. (b) zero. (c) the price of the corresponding CD. (d) the opportunity cost of the artist.

62. Not among “positive checks” that Reverend Thomas Robert Malthus identified as limiting population growth was the preventive check: (a) disease. (b) famine. (c) pestilence. (d) birth control. (e) war.

63. Carl Menger, the founder of Austrian economics once wrote, "All things are subject to the law of cause and effect. This great principle knows no exception." Menger’s statement is most consistent with a metaphysical perspective known as: (a) transcendentalism. (b) Platonism. (c) introspection. (d) scholasticism. (e) determinism.

64. The dispute between Antoine-Augustin Cournot and Joseph Louis Francois Bertrand about whether duopolists competing in a market would adjust quantities or prices was later echoed in disagreements between: (a) David Ricardo and Thomas Malthus about the desirability of the British Corn Laws. (b) Alfred Marshall and León Walras about whether disequilibria are resolved by quantity adjustments (Marshall) or price adjustments (Walras), and between neoclassical macroeconomic theorists (price adjustments) and Keynesians (quantity adjustments in depressed economies). (c) Joan Robinson and Edwin Chamberlin, who differed about whether oligopolists adjust prices or compete primarily through product differentiation. (d) John Maynard Keynes and Milton Friedman on whether fiscal policies or monetary policies would more quickly cure a depression. (e) Paul Sweezy and George Stigler on the realism of kinked demand curve models.

65. That the real cost of government is not the government revenues collected as taxes, but is instead the value of the goods and resources government uses, is the conceptual foundation for: (a) advocacy of laissez faire policies by physiocrats and classical liberals. (b) anarcho-syndicalists’ animosity towards government. (c) Ricardian equivalence. (d) modern libertarianism. (e) John Stuart Mill’s preference for inheritance taxes to replace income taxes in paying for such amenities as public schools and roads.

66. Adam Smith and the “classical liberal” economists who followed in his footsteps viewed persistent monopolization and market power as: (a) inefficient and best regulated by government. (b) crucial in determining the rate of technological progress. (c) radical plots to overthrow capitalism. (d) symptoms of governmental interference in the market, and much less efficient than competitive markets.

67. David Ricardo’s Iron Law of Wages states that if money wages increase for a significant period, this leads to expansion of: (a) the money supply so that inflation shrinks real wages back to a natural rate. (b) profit-taking by capitalists so that the share of total surplus value out of national income increases. (c) the domestic production of grain to support an increasingly prosperous populace. (d) demands for labor in the industrial sector, and a reduced supply of labor in the agricultural sector. (e) population, thereby driving wages back down to their natural level.

68. Violent revolution against capitalism would be most likely to be advocated by: (a) Christian socialists. (b) Fabian socialists. (c) syndicalists. (d) Utopian socialists. (e) democratic socialists.

69. Differences in methodological foundations between the ancient Greek philosophers Zeno and Heraclites revolved around whether: (a) assorted atoms are the building blocks of the universe as opposed to earth, wind, and fire. (b) humans are innately acquisitive and self-interested, or are primarily social and cooperative. (c) material goods or ideas are the primary determinants of historical change. (d) democratic governments or enlightened “philosopher kings” would set more optimal social policies. (e) the universe is essentially static, with only relatively superficial change, or dynamic, with few constants and significant and recurring disruptions.

70. Critics cite use of the awkward sequence “QWERTY” for the first five letters on the top row of letters for most computer keyboard as an example of inefficiencies that derive from: (a) path dependency. (b) analytical determinism. (c) queuing. (d) regulation. (e) All of the above.

71. Some thinkers believe that collective ownership can foster a love of work and education, and facilitate replacement of competitive greed with internal desires to share the fruits of our individual labor. The idea that internal satisfaction can replace self-interested materialism is least compatible with (a) Abraham Maslow’s upper levels in his hierarchy of needs. (b) Adam Smith’s invisible hand. (c) Mohandas Gandhi’s views, sometimes characterized as small is beautiful. (d) Karl Marx’s ultimate communist society. (e) Mao Zedong’s attempts to mold a “new man in China.” (f) Utopian socialism.

72. Antoine Augustin Cournot (1801-1877) was a school superintendent, but he was also renowned as a philosopher, and he was arguably among the top-ten all-time pioneers of economic theory. His path-breaking contributions did not include developing: (a) a proof that marginal revenue = marginal cost is a requirement for profit maximization. (b) an early form of game theory. (c) demand and supply curves as the partial derivatives of demand and supply functions. (d) a formal model of pure or perfect competition. (e) the concept of marginal revenue.

73. According to John Stuart Mill’s theory of gold and the supply of money, if the United States used a gold standard to back all printed currency at a 100% rate, then the price level would be controlled primarily by: (a) Alan Greenspan. (b) the Federal Reserve System’s open market operations. (c) the operation of the U.S. Mint. (d) the resource costs incurred by gold miners.

74. The idea that furthering the prospects of an individual organism’s “breeding rights” motivates behavior to enhance class, status, and power, is most central to the discipline of: (a) sociology. (b) Homo economicus. (c) Darwinian evolution. (d) sociobiology. (e) behavioral economics.

75. Pre‑World War I syndicalist radicals who sought to take over U.S. industry were members of the: (a) Fabian Society. (b) International Workers of the World, aka wobblies. (c) Abraham Lincoln Brigade. (d) Socialist Workers Party. (e) Knights of Labor.

76. A centerpiece of Fabian socialism was advocacy of the: (a) abolition of slavery. (b) nationalization of most heavy industry. (c) revolution of the proletariat. (d) abolition of inheritance in all its forms. (e) legalization of most psychoactive pharmaceuticals.

77. The labor theory of value was not among the foundations for the theories of: (a) François Quesnay. (b) John Locke. (c) Adam Smith. (d) Thomas Malthus. (e) David Ricardo. (f) John Stuart Mill. (g) Karl Marx.

78. Adam Smith’s concept that the market system automatically adjusts as if guided by an “invisible hand” most closely resembles: (a) flows of electricity across the microcircuits in computer chips. (b) homeostasis – automatic adjustments that help maintain the health of a biological organism. (c) gravitational forces that prevent matter from escaping “black holes” out in the cosmos. (d) the drive to perpetuate an organism’s gene pool cited by sociobiologists. (e) humanitarian relief efforts launched by outsiders to aid people beset by catastrophe.
79. In the long run, workers are unlikely to gain from an increase in wages. As the wage rises, workers tend to have more children, thus eventually squandering away any potential gains. In the end, the landowner class is the most likely to gain from an expansion of national income and production. This argument most accurately accords with a theory of income distribution developed by: (a) Paul Erhlich. (b) Adam Smith. (c) Thomas Robert Malthus . (d) David Ricardo. (e) Vilfredo Pareto.
80. Karl Marx predicted that the rate of profit would fall over time because capitalist competition and diminishing returns would offset technological advances. Similar predictions are found nowhere in the writings of: (a) Adam Smith. (b) David Ricardo. (c) Thomas Malthus. (d) John Stuart Mill. (e) Albertus Magnus.
81. Most of standard economic analysis implicitly assumes that all property rights are determined by: (a) government regulations and laws. (b) purely private contracts. (c) supply and demand. (d) the labor theory of value. (e) the social contract.
82. The theories of Thomas Robert Malthus and David Ricardo were most in accord on the long-run determinants of: (a) rental rates on land. (b) national income. (c) monopoly power. (d) population and wage rates. (e) civil and political rights.
83. Karl Marx theorized that the stage of economic development that immediately precedes the final state of communism or socialism would be: (a) capitalism. (b) feudalism. (c) a dictatorship of the proletariat. (d) primitive culture. (e) Utopia.
84. David Ricardo’s model suggests that the primary beneficiaries of economic growth are: (a) tax hungry politicians. (b) ambitious entrepreneurs. (c) wage laborers. (d) capitalists. (e) landowners.
85. Some cynical thinkers believe that, regardless of the form of political or social organization, leaders are usually megalomaniacs who care little about the welfare of others. These egotists gravitate to leadership positions because of an exceptional “will to power,” but they may not be especially smart or wise – although they tend to be both slyer and more manipulative than most people. Pessimistic thinkers who have elaborated such fatalistic theories do not include: (a) Lord Acton. (b) Vilfredo Pareto. (c) Roberto Michels. (d) Karl Marx. (e) Gaetano Mosca. (f) Friedrich Nietzsche.
86. Management of the economy via extensive regulations and laws specified by the national government is most consistent with: (a) syndicalism. (b) mercantilism. (c) communism, the next stage after a Marxist “dictatorship of the proletariat. (d) classical liberalism. (e) anarchism. (f) Francois Quesnay and other physiocrats. (g) the ideas of Thomas Jefferson and Mohandas Gandhi.
87. When people engaged in private decision-making ignore the consequences their choices will have on people with whom they do not deal directly, there is a problem known as (a) public goods. (b) externalities. (c) usury. (d) the social fallacy. (e) free loading.
88. The statistical term regression was developed by Francis Galton to summarize a broad tendency for: (a) what goes up to come down and what goes down to move up. (b) bureaucratic rules to become increasingly rigid across time. (c) inertia in time series data causing any trends to be continued unless disrupted. (d) civilizations that have become hegemonic to decay. (e) children’s characteristics to be closer to the mean than are the characteristics of their parents.
89. “The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas…. But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil…” The author of the preceding quote was: (a) Paul Samuelson. (b) John Stuart Mill. (c) Thomas Robert Malthus. (d) Robert Heilbronner. (e) John Maynard Keynes.
90. The idea that prices are determined in large part by how much consumers are willing to pay for goods is central to: (a) classical liberalism. (b) the Essai written by Richard Cantillon. (c) Aristotle’s explanation for the diamond-water paradox, also known as the paradox of value. (d) Adam Smith’s description of the “invisible hand.” (e) Francois Quesnay’s Tableau Economique.
91. Scarcity is chronic and incurable if scarcity exists because our limited resources and technologies cannot produce sufficient goods to fully satisfy our unlimited wants. Thinkers who viewed scarcity as potentially resolved by curbing our appetites for material goods included: (a) Jeremy Bentham. (b) Mohandas Gandhi. (c) Protagoras. (d) Karl Marx. (e) Xenophon.
92. Critics would be least likely to identify as “market failures” specific to capitalism such problems as: (a) inadequate adjustments for negative externalities as pollution. (b) enormous disparities in the distributions of income and wealth. (c) inadequate market incentives for basic scientific research. (d) control over government policies by a small autocratic elite. (e) the promotion of destructively competitive instead of productively cooperative modes of behavior.
93. The payment of interest was not viewed as exploitative, sinful, evil, or immoral, by: (a) Thomas Aquinas. (b) Abu Hamid al-Ghazali and other early Islamic scholars (c) Karl Marx. (d) medieval scholastics. (e) such nineteenth-century “classical liberals” as John Stuart Mill. (f) Aristotle.
94. The Marxist concept of surplus value would not include income received in the form of: (a) wages. (b) rent. (c) interest. (d) corporate profits. (e) proprietor profits.
95. Saint Thomas More, the French philosopher Charles Fourier, and the British philanthropist Robert Owen embraced a model of socialism in which collective ownership would facilitate replacement of competitive greed by internal desires to share the fruits of one’s production and a love of work and education. This philosophy, disparaged by Karl Marx as hopelessly idealistic, is called: (a) revolutionary socialism. (b) Utopian socialism. (c) Christian socialism. (d) Fabian socialism. (e) evangelical socialism.
96. Scientific studies intended to explain empirical phenomena with mechanistic models that posit cause-and-effect relationships are based on a perspective known as: (a) stochasticity. (b) metaphysics. (c) determinism. (d) predestination. (e) atheism.
97. Alternatives to capitalistic economic systems do not include: (a) communism. (b) socialism. (c) anarchism. (d) federalism. (e) feudalism. (f) syndicalism.
98. John Stuart Mill was a staunch advocate of the idea that maximizing personal liberty requires equality of: (a) income. (b) talent. (c) capital. (d) wages. (e) opportunity
99. When the Labour Party controlled the British Parliament during some periods 1930 -1980, much of heavy industry was nationalized and often effectively confiscatory tax rates were imposed on above-average incomes. The results of these policies did not include: (a) emigration from England by many high-income actors, artists and musicians. (b) low rates of investment in new capital. (c) relatively slow rates of economic growth. (d) reduced consumption of extravagant luxury goods by upper-class citizens. (e) lagged adoption of new technologies relative to faster growing advanced economies.
100. Sociologists explain much of human behavior as aimed at acquiring class, status and power. Moving up in the “pecking order” of a social hierarchy is least central to the theories of: (a) Talcott Parsons, who developed the theory of social homeostasis. (b) orthodox economics. (c) sociobiologists. (d) evolutionary psychology.

101. “Render unto Caesar that which is Caesar’s, and unto God that which is God’s”. (Matthew 22:21). This passage from the Bible: (a) is frequently cited by conservative theologians who believe in preserving existing distributions of income, wealth, status, and power. (b) was quoted by Reverend Thomas Robert Malthus in a famous sermon to the House of Commons. (c) was used by mercantilists to justify the accumulation of gold. (d) is most often cited by Christian socialists who believe in redistributing income, wealth, status, and power.

102. The society once most intent on molding human nature away from individualistic greed was: (a) Yugoslavia under Tito. (b) China under Mao Zedong. (c) France under Louis XVI. (d) Soviet Russia under Stalin. (e) Sweden under King Gustav V.

103. François Quesnay, after observing the workings of the French economy, concluded that: (a) cottage industries were the backbone of the 18^th century French economy. (b) agriculture is the basis of all wealth. (c) industrialism on a large scale would both provide jobs to combat unemployment and help to finance France’s military ventures. (d) taxes were not high enough on the common people, but were too high on wealthy members of society.

104. In such modern Scandinavian welfare states as Sweden: (a) productive resources are largely privately owned. (b) high tax rates are responsible for low labor productivity. (c) there are frequent conflicts between labor and management. (d) syndicalist workers own and manage many factories. (e) major macroeconomic investments and allocative decisions are dominated by central government planning.

105. The key idea underpinning David Hume’s price-specie flow mechanism that most mercantilists failed to grasp is known today as: (a) the equimarginal principle. (b) the wages-fund doctrine. (c) the quantity theory of money. (d) partial equilibrium analysis. (d) competitive resource markets.

106. The classical liberal who initially accepted but eventually rejected the idea that, in the long run, workers are doomed to live miserable lives because the equilibrium wage rate is at a bare subsistence level was: (a) Adam Smith. (b) Jeremy Bentham. (c) Thomas Robert Malthus. (c) David Ricardo. (e) John Stuart Mill.

107. Socialism is an economic philosophy that emphasizes: (a) nationalization only of heavy industry. (b) social ownership of major capital and property resources. (c) rewards according to productive contribution. (d) market resolutions of economic problems. (e) private ownership of heavy industries.

108. England’s Labour Party is most directly the ideological descendant of: (a) Christian socialism. (b) the “wobblies” – also known as the International Workers of the World. (c) syndicalism. (d) libertarianism. (e) the Fabian Society. (f) classical liberalism. (g) mercantilism.

109. Karl Marx’s notion that most people advocate social or legal “reforms” favoring the interests of groups to which they personally belong, and that they then erect ethical arguments to support such positions is known as: (a) self interested opportunism. (b) naïve egoism. (c) class interest or class conflict. (d) dialectical materialism. (e) myopic solipsism.

110. In his treatise On Liberty, John Stuart Mill opined that “…there are many acts which, being directly injurious only to the agents themselves, ought not to be legally interdicted” would attract most wholehearted agreement from modern: (a) libertarians. (b) syndicalists. (c) fundamentalists. (d) scholastics. (e) royalists. (f) real business cycle theorists.

111. David Ricardo concluded that the group most likely to gain in the long-run from population growth would be: (a) capitalists. (b) workers. (c) the bourgeoisie. (d) landowners. (e) entrepreneurs.

112. In Marxist jargon, interest, rent and profit are collectively known as: (a) surplus values. (b) exploitation indicators. (c) concentration indicators. (d) dialectical materials. (e) economic dialectics.

113. The International Workers of the World (IWW) “wobblies” were: (a) responsible for nationalizing British heavy industry. (b) in favor of collective bargaining and profit sharing. (c) Russian liberals overthrown by V. I. Lenin’s Bolsheviks. (d) instrumental in establishing Yugoslavian worker committees. (e) pre-World War I syndicalist radicals who sought to take over U.S. industry.

114. Central aspects of or predictions derived from Marxist theory do NOT include the idea that, in a capitalist system: (a) behavior is driven in large part by class interests. (c) industries will become more concentrated across time. (c) globalization will cause specific goods to be produced in the country that can produce them at the lowest possible cost. (d) business cycles are dynamically stable. (e) all incomes except for wage payments are surplus values that arise from the exploitation of labor, and tend to increase relative to wages as capitalism matures. (f) the proletariat will eventually overthrow capitalists and their bourgeoisie lackeys in a short bloody revolution. (g) under globalized capitalism, national borders will become less important across time. (h) government will eventually disappear from the face of the earth. (i) wealth and power become increasingly concentrated across time. (j) feudal economies are less likely to experience communist revolutions than are mature capitalist economies. (k) capitalism fosters competition and self-interested behavior.

115. From an economic vantage point, broadly defined legal rights most directly determine individuals’: (a) property rights. (b) criminal propensities. (c) class, status, and power. (d) natural rights. (e) social hierarchies.

116. Behavioral theorists who believe that nature [e.g., genetics] far more than nurture [environment or conditioning] determines the ways that people act and interact, would include: (a) Abraham Maslow. (b) Franz Boaz. (c) Margaret Meade. (d) Ivan Pavlov. (e) B.F. Skinner. (f) Francis Galton.

117. The sacrifices of parents who pay for their children’s college educations when they could otherwise be consuming more goods personally is most completely explained by the basic assumptions of: (a) conventional economics. (b) anthropologists. (c) physiocrats. (d) sociologists. (e) sociobiologists.

118. The thinker who most fully anticipated specific current aspects of globalization as capitalist markets were increasingly adopted throughout the world was: (a) Karl Marx. (b) Richard Cantillon. (c) David Hume. (d) Adam Smith. (e) Francois Quesnay. (f) Bernard de Mandeville. (g) Thomas Mun. (h) David Ricardo. (i) Alexander Hamilton.

119. Thomas Carlyle labeled economics “the dismal science” in his rebuttal of: (a) John Stuart Mill’s advocacy of the abolition of slavery. (b) Quesnay’s Tableau Economique. (c) Thomas Malthus’s Essay on Population. (d) David Ricardo’s Iron Law of Wages. (e) Adam Smith’s Wealth of Nations.

120. The first economic thinkers to discuss gains in production derived from a division of labor were: (a) Richard Cantillon and Adam Smith. (b) Thomas Aquinas and other medieval scholastics. (c) fifth century Chinese philosophers. (d) François Quesnay and other physiocrats. (e) Thomas Munn and other mercantilists. (f) Xenophon and some other ancient Greeks.

121. Of the following, the economist whose theories pivoted least on the distribution of wealth and income (class conflict?) under a capitalist system would have been: (a) Adam Smith. (b) David Ricardo. (c) Karl Marx. (d) Thomas Malthus. (e) John Stuart Mill.

122. Markets as mechanisms for exchange began to significantly outweigh individual trading relatively late in the period that Karl Marx characterized as: (a) prehistory. (b) primitive culture. (c) feudalism. (d) monarchism. (e) the industrial revolution. (f) capitalism.

123. According to dialectical materialism, the antithesis (internal contradiction) to the capitalism “thesis” that emerges as capitalism matures is: (a) the exploited proletariat. (b) peaceful cooperation. (c) wage fund theory. (d) cooperative agriculture. (e) population control.

124. The celebrated philosopher who wrote On Liberty, significantly relied on the labor theory of value, and who’s Principles of Political Economy most completely synthesized classical economics, was (a) Henry George. (b) Leon Walras. (c) Nassau Senior, Jr. (d) Vilfredo Pareto. (e) John Stuart Mill.

125. The thinker who would most strongly have disagreed with a statement that “charging interest on loans is unethical because money does not directly generate valuable physical output” would have been: (a) Richard Cantillon. (b) Abu-Hamid al Ghazali. (c) Albertus Magnus. (d) Aristotle. (e) Jeremy Bentham. (f) Ibn Kaldun. (g) Thomas Aquinas.

126. The view that small is both beautiful and necessary is central to the schools of thought known as: (a) nationalism and institutionalism. (b) Buddhist economics and limits to growth. (c) feudalism and monarchism. (d) central planning and command economics.

127. In Voltaire’s novel, Candide, his character Dr. Pangloss opines that “we live in the best of all possible worlds.” This dour prediction is most consistent with the views of capitalism expressed by: (a) anarcho-syndicalists. (b) medieval scholastics. (d) Karl Marx. (e) most classical economists.

128. French revolutionaries proclaimed goals of “Liberte! Egalite! Fraternite!” during the 1790s. The characteristic that would least well apply to an idealized economic system of socialism would be: (a) vigorous rivalry and competition among business firms. (b) social ownership of productive resources. (b) collective decision making. (d) equality of opportunity and equality in the distribution of income and wealth. (e) compassion for the wellbeing of others.

129. Libertarians believe that government can be useful: (a) because central planning will eliminate scarcity. (b) by enforcing contracts and protecting private property rights. (c) in facilitating the evolution of capitalism into socialism. (d) because good laws can facilitate central planning and growth. (e) because corporate executives are more corruptible than government bureaucrats.

130. Least consistent with Adam Smith’s theory of wages would be the idea that wages vary positively with the: (a) stability of employment and the probability of success in an occupation. (b) effort required to learn skills necessary to accomplish particular types of work. (c) danger and discomfort associated with employment. (d) amount of trust that must be placed in the employee.

131. The argument that infant industries should be protected from competition by established foreign industries was first advanced by: (a) Richard List. (b) Gustav Schmoller. (c) David Ricardo. (d) Alexander Hamilton. (e) Thomas Robert Malthus. (f) early mercantilists.

132. Orderly static analyses are consistent with the view of nature expressed most formally by: (a) Heraclites. (b) Zeno. (c) Aristotle. (d) Socrates. (e) Epicurus.

133. According to Karl Marx, economic history: (a) is determined by the interaction of Aggregate Demand and Aggregate Supply. (b) is the result of class struggles. (c) will reach its pinnacle when centrally-planned socialism replaces capitalism. (d) arises when new social and philosophical ideas are introduced into the economic structure.

134. Production automatically generates income of comparable value, and no one produces anything for the market unless they intend to buy something else. This line of reasoning implies that, in the aggregate, demand is automatically present if goods are supplied, and is the primary underpinning for: (a) Jean Baptiste Say’s “Law of Markets”, which is sometimes summarized as “supply creates its own demand.” (b) Keynesian theory, which asserts that no one will produce anything unless they expect someone else to buy it. (c) George Stigler’s Law, which asserts that the sum of excess demands must equal the sum of excess supplies. (d) Adam Smith’s concept of “the invisible hand” of the market place. (e) David Ricardo’s theory of specialization and trade according to comparative advantage.

135. In the Wealth of Nations, Adam Smith argues that a nation's true wealth is its ability to: (a) acquire stocks of financial capital. (b) inspire its people’s courage and diligence. (c) provide goods and services for its people. (d) tax its people, reinvest tax revenues, and build surpluses in its treasury. (e) assist its manufacturing firms in exporting goods and services.

136. Two notable cognitive psychologists who concluded that humans treat risk much less symmetrically than economists conventionally assume, and that people are also are far less rationally consistent than economists commonly suppose, are: (a) Havelock Ellis and Alfred Kinsey. (b) Erich Fromm and Sigmund Freud. (c) Ivan Pavlov and B.F. Skinner. (d) Amos Tversky and Daniel Kahneman. (e) Abraham Maslow and Rollo May.

137. The idea that wages are largely determined by biological requirements, only slightly if at all enhanced by cultural standards, is called the: (a) classical school of economics. (b) subsistence theory of wages. (c) theory of socialism. (d) dialectical materialism.

138. Adam Smith’s argument that a nation's wealth is not the gold it possesses, but is instead its ability to provide goods for its people, was most clearly anticipated in the earlier writings of: (a) David Hume. (b). Oliver Cromwell. (c) Francois Quesnay. (d) Aristotle. (e) Thomas Aquinas.

139. The notion that particular historical events have relatively little influence on subsequent social structures, including economic arrangements, is least consistent with the views of (a) Talcott Parsons and his theory of social homeostasis. (b) Zeno’s view that the universe is essentially static and conforms to well-behaved principles. (c) the metaphysical theory of determinism. (d) modern strands of thought derived from Heraclites in the form of path dependency, chaos theory, and hysterisis models.

140. The thinker whose ideas were least consistent with the notion that most economic decisions should (will) be “top down” [i.e., made by government or the church or some other elite individual or group] would be: (a) Gaetano Mosca. (b) David Ricardo. (c) Vilfredo Pareto. (d) Friedrich Nietzsche. (e) Roberto Michels. (f) Thomas Aquinas. (g) Plato. (h) Aristotle.

141. In purely competitive markets, the efficiency characteristics of an equilibrium price arguably correspond most closely to the: (a) medieval concept of a “just price.” (b) labor theory of value. (c) physiocrats’ assumption that agriculture is the ultimate source of all value. (d) surplus value concept developed by Karl Marx.

142. The theory that the universe is so static so that any disruption would have no long term effects, and that the broad principles that characterized the pre-disruption state would inevitably be reattained, was exposited by: (a) Heraclites. (b) Pythagoras. (c) Zeno. (d) Aristotle. (e) Epicurus. (f) Ptolemy. (g) Socrates.

143. Positive scientific hypotheses would most logically include such statements as: (a) people who murder with premeditation should be executed. (b) a woman without a man is happier than a fish without a bicycle. (c) General MacArthur was the greatest military leader of the 20^th century. (d) beauty contests are sexist. (e) the president of France is three months pregnant.

144. The most synonymous of the following terms for school of thought would be: (a) ideology. (b) weltschmerz. (c) paradigm. (d) discipline. (e) kindergarten.

145. Documents that were published in the same year would include: (a) Francois Quesnay’s Tableau Economique and Karl Marx’s Das Kapital, Volume I. (b) the Treaty of Paris and the Treaty of Versailles. (c) the Monroe Doctrine and the Treaty of Ghent. (d) Magna Carta and St Augustine’s City of God. (e) Declaration of Independence and Adam Smith’s Wealth of Nations.

146. The medieval scholastic who extracted moral economic principles including the idea of “a just price” by applying Aristotelian logic to parts of the Bible was: (a) Augustus Theophrastus Bomabastus von Hohenheim. (b) Thomas Aquinas. (c) Albertus Magnus. (d) Galen. (e) Augustine.

147. Francois Quesnay’s Tableau Économique presented an early version of the: (a) supply and demand curve. (b) labor theory of value. (c) quantity theory of money. (d) circular flow model of income.

148. The theory that everything in the universe could be perfectly explained by correct understandings of the mechanisms of logic, mathematics, chemistry, and physics, is known as: (a) determinism. (b) destination. (c) transcendentalism. (d) Platonism. (e) scholasticism.

149. The broad theory that behavior by any sentient beings (including humanoids) is ultimately dominated by a drive to perpetuate the organism’s gene pool is known as: (a) sociobiology. (b) anthropomorphism. (c) social Darwinism. (d) dialectical materialism. (e) Homo economicus. (f) polydactylism.

150. Most modern economists would agree with Hugo Grotius and Thomas Hobbes in the view that broadly defined legal rights most directly determine: (a) class structures among different economic groups. (b) whether or not certain behavior is immoral, unethical, or criminal. (c) social status and position. (d) the distribution of property rights among individuals.

151. Abraham Maslow’s hierarchy of wants can be illustrated by a pyramid on which the five components he proposed, starting from the bottom and building sequentially to the top, are: (a) security à physiological à respect/love à self-actualization à peace. (b) shelter à security à loveà self-actualization à humanitarian. (c) physiological needs à security à respect/love à humanitarian à self-actualization. (d) food à clothing à shelter à love à security.

152. John Stuart Mill favored achieving greater equality in the distribution of wealth primarily through: (a) limits on inherited bequests. (b) highly regressive income taxes. (c) generous welfare programs. (d) voluntary charitable contributions. (e) caps on income.

153. A person who explains the world through a set of formulaic questions and then faith based, authoritarian answers is, perhaps unconsciously, following the methodology of: (a) Druid monks. (b) medieval scholastics. (c) David Ricardo. (d) Utopian socialists. (e) modern libertarians. (f) transcendental meditators.

154. A sequence of argument such as “If A exceeds B, and B exceeds C, then A exceeds than C”, which was central to the methods of inquiry developed by the ancient Greeks [Socrates, Plato, Aristotle, et al.) is an example of: (a) a logical syllogism. (b) dialecticism. (c) quantification. (d) scientism. (e) didacticsm.

155. Building blocks for a capitalist system include: (a) all of the below. (b) supplies and demands. (c) private property rights. (d) laissez-faire policies. (e) market-determined prices and outputs.

156. Supernatural power, divinity, and gifts of nature are integral to the explanations of economic events developed by: (a) physiocrats. (b) German historicists. (c) modern monetarists. (d) mercantilists. (e) Keynesians. (f) classical liberals.

157. The distinction between market price and intrinsic value was the key issue addressed in: (a) Karl Marx’s revision of the John Locke’s labor theory of value. (b) Aristotle’s “diamond-water” paradox. (c) the Austrian emphasis on the subjective nature of value. (d) Augustine’s inquiry into differences between value in use and value in exchange. (e) debates between Thomas Malthus and David Ricardo over the merits of the British “corn laws.”

158. Nationalism, self-sufficiency, and imperial power were central concerns of: (a) French physiocrats. (b) Thomas Malthus. (c) mercantilists. (d) Adam Smith. (e) neoclassical economists.

159. Jeremy Bentham would have been least familiar with the idea that: (a) criminals should be punished proportionally to the harm done to society, without consideration of motive, intent or remorse. (b) consumers are in equilibrium when relative market prices are precisely proportional to the ratios of the marginal utilities [marginal jollies] from various goods. (c) that proper goal of society is to secure the “greatest good [or happiness] for the greatest number.” (d) Adam Smith viewed most of economic activity as being best regulated by the “invisible hand” of market forces.

160. According to late 19^th Century versions of the labor theory of value: (a) the interactions of supply and demand determine relative prices. (b) the value of anything is exactly proportional to the labor time socially necessary for its production. (c) human capital and labor are equally "socially necessary" for production. (d) demand is more important than supply in determining the relative value of anything.

161. Fervently held metaphysical/religious beliefs were least central to the writings of: (a) John Stuart Mill. (b) Abu Hamid al-Ghazali. (c) Ibn Khaldun. (d) Thomas Aquinas. (e) Karl Marx.

162. Mercantilism holds that maximizing the wealth of a nation requires the nation to: (a) pay all workers just prices. (b) encourage large firms to form strategic alliances so that they can outperform foreign producers. (c) decentralize its government. (d) deregulate foreign trade policy. (e) maximize exports minus imports, thereby accumulating precious metals.

163. John Maynard Keynes asserted that social change is most heavily influenced by: (a) the ideas of economic philosophers and theorists. (b) mindless conformity and harmful social conventions. (c) the concentrated economic and political power wielded by special interest groups. (d) use of the scientific method to generate new knowledge and innovate new products and technologies. (e) religious zealotry.

164. “Economic liberals” in England from the time of John Locke through the early writings of John Stuart Mill attributed all value and wealth as ultimately derived from: (a) private property in accord with its assignment by the crown. (b) agriculture. (c) human labor. (d) free international trade. (e) the marginal productivity theory of income distribution.

165. Advocates of central economic planning would be least likely to sympathize with the teachings of: (a) Karl Marx. (b) Jeremy Bentham. (c) Plato. (d) Richard Cantillon. (e) Mao Zedong.

166. Early versions of the quantity theory of money were developed [in chronological order] by: (a) Guan Zhong, John Locke, and David Hume. (b) Socrates, Plato, and Aristotle. (c) Dudley North, Charles Davenant, and Rene Descartes. (d) Bernard Mandeville, Friedrich Engels, and John Law. (e) Adam Smith, David Ricardo, and Thomas Malthus.

167. Fabian socialists differ from Utopian socialists by advocating the: (a) direction of industry by trade union syndicates. (b) legalization of child labor. (c) nationalization of heavy industry. (d) distribution of income and wealth by resource ownership and prices. (e) violent overthrow of imperialistic capitalism.

168. That wages vary in inverse proportion to the agreeableness and constancy of the employment was an idea first explicitly stated by. (a) Adam Smith. (b) Karl Marx. (c) Thomas Malthus. (d) John Stuart Mill. (e) David Ricardo.

169. To be eternally part of an organization where utilitarian principles were discussed was among the lifelong goals of: (a) Jeremy Bentham. (b) Robert Owen. (c) Saint Simon. (d) John Stuart Mill

170. A social theory that does not advocate the ultimate minimization or elimination of an economic role for government is: (a) Marxism. (b) laissez faire capitalism. (c) syndicalism. (d) Fabian socialism. (e) Utopian socialism.

171. According to Socrates, Plato, Aristotle and many other ancient Greeks: (a) only agriculture can enlarge the circular flow of income and expenditure. (b) moral principles, rather than impersonal market forces, should determine the “just price” of a good. (c) the market system should be subject to administrative control to ensure distributive justice. (d) exports should be encouraged and imports discouraged. (e) regulation and taxation cause economic stagnation.

172. Curve abcde is an example of a/an: (a) population S-curve consistent with the theories of Rev. Thomas Malthus. (b) cataclysm curve consistent with Adam Smith’s invisible hand. (c) classical macro-equilibrium point. (d) ecosystem disequilibrium path. 173. On average, life would be most miserable at point: (a) a. (b) b. (c) c. (d) d. (e) e.

174. John Stuart Mill believed trade will take place at such prices as are required to make the value of imports equal the total value of exports, simultaneously, for each party to trade. This was called (a) vice-versa theory. (b) exchange theory. (c) trade-off supply theory. (d) reciprocal demand theory. (e) bartering supply theory.

175. Private property rights are LEAST compatible with pure: (a) libertarianism. (b) anarchism. (c) laissez-faire policies. (d) syndicalism and pure socialism.. (e) capitalism.

176. A thinker who described the advantages of a division of labor and who also rationalized profits as rewards for entrepreneurs in writings that pre-dated Smith’s Wealth of Nations was: (a) David Hume. (b) Francois Quesnay. (c) Bernard Mandeville. (d) Richard Cantillon. (e) Hesiod.

177. Francois Quesnay’s early version of the circular flow model focused primarily on: (a) the production of industrial goods and professional services. (b) government policies and the burdens of taxation. (c) macroeconomic policy. (d) the production and distribution of agricultural products. (e) industrialization and manufacturing.

178. Not among proper activities for government to undertake, in the view of Adam Smith, would be for the government to: (a) maintain public institutions and public works. (b) protect society from invasion. (c) act as a medium for law and justice. (d) regulate prices to ensure against “price-gouging.” (e) enforce contracts.

179. Neither the “dialectic method” developed as an explanation for advances in understanding by Georg Hegel nor the version altered by Karl Marx as an explanation of all history (dialectical materialism) would be particularly consistent with the notion that: (a) thesis +antithesis è synthesis. (b) Marxism + Christian socialism è liberation theology. (c) mature capitalism + exploited proletariats è revolution. (d) individual aptitude + individual effort è economic success. (e) long + short è distance.

180. If we plot the relationship between the wage rate [the dependent variable] and the amount of labor [the independent variable] for David Ricardo’s Iron Law of Wages, the curve will be: (a) upward sloping. (b) a rectangular hyperbola. (c) a linear negative relationship. (d) flat in the short run.

181. Mercantilists would most likely agree that trade: (a) should be promoted through the reduction of tariffs. (b) should contribute to the wealth and power of a nation. (c) is probably most efficient if largely unencumbered by tariffs or quotas. (d) is expected to be mutually beneficial to all parties involved. (e) widens inequitable disparities in the distribution of national income.

182. Overlooked by Adam Smith and later elaborated in David Ricardo’s exposition of the potential gains from international trade was the concept of: (a) the invisible hand. (b) the monetary theory of value. (c) pragmatism. (d) unbalanced trade. (e) comparative advantage.

183. The Age of Enlightenment reflected increased reliance on logic as a mechanism for ascertaining truth, and a growing belief that hierarchical authority lacks a monopoly on reason and scientific methodology. This school of thought set the stage for such documents as the: (a) American Declaration of Independence and Adam Smith’s Wealth of Nations. (b) Treaty of Paris and Treaty of Versailles. (c) Monroe Doctrine and Treaty of Ghent. (d) England’s Magna Carta and St Augustine’s City of God.

184. Antoine Augustin Cournot established that profit maximization requires: (a) MC=MR. (b) MR= PQ. (c) MR= MU. (d) QS= QD.

185. An allocation mechanism not paired with an appropriate example would be: (a) Merit; awarding better grades to the students who perform better on an exam. (b) Random selection; Congress activates a draft to secure soldiers to serve in Iraq. (c) Tradition; an oldest son inherits a family-owned auto repair shop. (d) Queuing; offering CEO positions to unqualified candidates to compensate those who suffer most because of capitalistic exploitation. (e) Brute force; Brutus hits Wimpy four times before Wimpy relents and gives Brutus his marbles and hamburgers.

186. The hypothesis that “people may know when they are happy, but _italics_” was supported by the results of _name_’s experiment in which people ate various amounts of ice cream and listened to music. (a) do not know how to maintain that happiness / Sir Richard Munn (b) must first be free to be happy / David Hume (c) are programmed to be unhappy / B.F. Skinner (d) do not know what will make them happy / Daniel Kahneman

187. The pair of concepts most in conflict are: (a) David Ricardo’s theory of comparative advantage and Adam Smith’s advocacy of laissez-faire policies. (b) Thomas Malthus’ model of population and Charles Darwin’s theory of evolution. (c) Heraclites’ and Zeno’s views on the stability of the universe. (d) Thomas Malthus’ theory of “general gluts” and John Maynard Keynes’ concept of equilibria at less than full employment. (e) John Stuart Mill’s and Karl Marx’s views about the effect pf inheritance on distributional equity.

188. The labor theory of value: (a) was elaborated by John Locke. (b) is still central to Marxist theory. (c) was once widely accepted by almost all English economists. (d) asserts that the value of any commodity is directly proportional to the socially necessary labor time it embodies. (e) All of the above.

189. The concept of hedonism deals with the pursuit of pleasure and the avoidance of pain. The idea that humans procrastinate to avoid pain while seeking more immediate pleasure is most associated with the ideas of: (a) Zeno and Thomas Malthus. (b) Xenophon and Jeremy Bentham. (c) Aristotle and David Ricardo. (d) Demosthenes and Plato. (e) Groucho Marx and John Lennon.

190. The statement that “To seek riches for riches’ sake is to fall into the sin of avarice” would have been most likely to have been subscribed to by: (a) medieval scholastics. (b) Augustus Caesar, Xenophon, and Aristotle. (c) early 18^th century physiocrats. (d) early 18^th century mercantilists. (e) 18^th century classical economists.

191. According to David Ricardo, if land on the margin is in use, its rent is: (a) one-tenth the rent of more productive land. (b) one-half the rent of more productive land. (c) zero. (d) determined solely by the supply curve. (e) paid by the local government to reward initiative and entrepreneurial spirit.

192. Least consistent with the neoclassical conclusion that a market economy automatically adjusts toward full and efficient employment so that “we live in the best of all possible worlds” [a la Dr. Pangloss in Voltaire’s Candide] would be: (a) Say’s law. (b) Adam Smith’s invisible hand. (c) flexible wages, prices, and interest rates. (d) Rev. Robert Malthus’s theories of consumption, population, and income-distribution.

193. According to David Ricardo, differences in land rents depend on differences in fertility. Johann H. von Thünen argued that land rents depend far more on: (a) the aesthetics of the scenery. (b) location. (c) population density. (d) subjective evaluations.

194. Although their reasons might differ, sets of thinkers most compatible in their views on whether or not it would be good policy to eliminate almost all barriers to international trade would include: (a) Alexander Hamilton, Thomas Malthus, and mercantilists. (b) Adam Smith, the physiocrats, and the German historicists. (c) Karl Marx, modern public choice theorists, and Utopian socialists. (d) Fabian socialists, libertarians, and syndicalists. (e) Christian socialists, neoclassical economists, and anarchists.

195. Economic theories about how punishment should depend on the crimes committed were least central to major analyses by: (a) Jeremy Bentham. (b) Gary Becker. (c) Sir Edwin Chadwick. (d) Reverent Thomas Malthus.

196. An economist who followed in the tradition of Richard Cantillon and Hans K.E. von Mangoldt in glorifying entrepreneurs as the driving forces in economic development, and who also suggested that as democracy increases, socialism will tend to displace capitalism, was: (a) Johann von Thünen. (b) Ludwig von Mises. (c) Friedrich Hayek. (d) Jon von Neumann. (e) Werner von Braun. (f) Claudius von Disputandum. (g) Joseph Schumpeter.

197. David Ricardo’s “wages fund” (the Iron Law of Wages) is such that if we plot the relationship between the wage rate [the dependent variable] and the amount of labor [the independent variable], the curve will be: (a) upward sloping. (b) a rectangular hyperbola. (c) a linear negative relationship. (d) flat in the short run.

198. Early classical economists such as Adam Smith and Thomas Malthus theorized that business cycles are primarily caused by changes in: (a) population in response to resource availability. (b) capitalists' ability to exploit labor. (c) socio-psychological mass movements. (d) unexpected business inventories. (e) public confidence or pessimism.

199. The law of diminishing marginal returns is encountered in the short run when more labor is hired because as production rises: (a) the remaining labor available for hire is less and less skilled. (b) customers are willing to pay only lower prices for extra goods. (c) each extra worker hired decreases the land and capital per worker, so the workplace becomes more congested and managerial control erodes. (d) attempts to save money cause firms to hire unqualified workers.

200. Jules Dupuit argued that inefficiencies in the provision of public goods such as bridges could be remedied through appropriate: (a) establishment of non-profit monopolies. (b) income tax rates. (c) application of the laws of demand and supply. (d) price discrimination.

201. If transaction costs. (the costs of information, mobility, and contracting) were zero, then all categories of “market failure” would be eliminated through voluntary exchange except for problems associated with potential: (a) public goods. (b) externalities. (c) nonrivalry and nonexclusion. (d) macroeconomic instability. (e) inequity.

202. According to the population theory of Rev. Thomas Malthus, an individual would probably benefit more (in the form of higher wages or more food) from a small rather than a large population. A similar concept is found in: (a) the wages-fund doctrine. (b) the labor theory of value. (c) Cournot’s theory of duopoly. (d) the equimarginal principle. (e) Wieser’s theory of imputation.

203. Henry David Thoreau’s observation that “In wilderness is the preservation of world” is compatible with both Thomas Jefferson’s preference for rural life and the views of: (a) physiocrats. (b) Keynesians. (c) classicists. (d) mercantilists. (e) imperialists.

204. The first clear example of the use of game theory in economic modeling was (a) Plato’s discussion of the relationship between ordinary citizens and the philosopher king. (b) Marx’s discussion of the clash between the proletariat and the bourgeoisie. (c) Dupuit’s exposition of efficient pricing for a public good, such as a bridge. (d) Cournot’s quantity adjustment model of a duopoly. (e) Descartes’ exposition of cogito ergo sum.

205. Firms that exercise market power but which lack the ability to price discriminate operate at inefficiently low levels of output because in equilibrium: (a) P>MC. (b) MR>MC. (c) P>ATC. (d) ATC<MC. (e) maximum profit is not required for monopolies not disciplined by competition.

206. Terms associated with dialectical analysis would include: (a) class warfare and the labor theory of value. (b) thesis, antithesis, and synthesis. (c) syndicates and worker cooperatives. (d) anarchy and chaos.

207. In modern parlance, David Hume statement about money that, “Tis none of the wheels of trade. Tis the oil,” was referring to the notion that money: (a) is relatively costly to produce. (b) facilitates divisions of labor and specialization and trade according to comparative advantage. (c) increases transactions costs. (d) generates seignorage profits for the Treasury at lower costs than is true of taxation. (e) lubricates overspeculation in financial instruments.

208. The “corn law” controversy arose between: (a) Ricardo and Malthus; Ricardo argued against them and Malthus for them. (b) Ricardo and Malthus; Malthus argued against them and Ricardo for them. (c) Bentham and Malthus; Bentham argued against them and Malthus for them. (d) Bentham and Malthus; Malthus argued against them and Bentham for them. (e) Bentham and Mill; Bentham argued against them and Mill for them.

209. In discussing the gold standard, John Stuart Mill expected that any deflation resulting from expansions of real national income that exceeded the growth rate of the stock of gold would cause: (a) deficits in that country’s balance of trade. (b) increases in the real wages of labor. (c) reduced reliance on foreign trade. (d) out migration of labor from the country. (e) increases in attempts to discover and produce gold.

210. In philosophical debates between historicists and analytical determinists, it is untrue that adherents of: (a) historicism believe that past events matter greatly in shaping the future. (b) analytical determinism believe that historical change is dominated by random and accidental events. (c) analytical determinism believe that the specifics of historical events are relatively trivial in the long run. (d) historicism believe that the decisions of individual entrepreneurs, political leaders, and other innovators can shape the course of human progress.

211. Interest, rent and profit are collectively known by Marxists as: (a) surplus values. (b) dialectics. (c) finance capital. (d) materialistic bloat.

212. Jeremy Bentham [1748-1832] was: (a) the owner of a pet pig he allowed to roam through his mansion. (b) the founder of utilitarianism. (c) appointed to the Board of Trustees of the University of London, and remains on the Board today. (d) stuffed and mummified after he died. (e) a lawyer intent on refining the legal system. (e) all of the above.

213. John Stuart Mill’s economic analysis and social philosophy were least shaped by ideas developed by: (a) James Mill. (b) Jeremy Bentham. (c) David Ricardo. (d) Alfred Marshall. (e) Adam Smith.

214. NOT among the key tenets of Marxism would have been: (a) von Thünen’s theory of economic rent. (b) dialectical materialism. (c) a “reserve army” of the unemployed. (d) a labor theory of value.

215. Prominent categories of socialism that advocate public ownership of the means of production do not include: (a) utopian socialism. (b) Fabian socialism. (c) Marxism. (d) Christian socialism. (e) libertarian socialism.

216. Richard Cantillon differed most markedly from most theorists of his era in emphasizing risk and the economic role played by: (a) workers. (b) entrepreneurs. (c) international trade. (d) agricultural land.

217. The theorist who expanded upon Carl Menger’s earlier assertions about pricing with a basic statement of the general law of value and who also invented the term “marginal utility” [although his analysis of marginal utility was preceded by that of Dupuit] was (a) Bohm-Bawerk. (b) H. K. E. von Mangoldt. (c) Friedrich von Wieser. (d) A. A. Cournot

218. The first economist to systematically distinguish between market price and intrinsic value was: (a) Thomas Malthus. (b) Jeremy Bentham. (c) Richard Cantillon. (d) Sir Edwin Chadwick. (e) John Stuart Mill.

219. The idea that all organizations are run by autocrats (the iron “law” of oligarchy) and that most people prefer being followers to being leaders is least consistent with the philosophy of: (a) Gaetano Mosca and Friedrich Nietzsche. (b) Vilfredo Pareto and Roberto Michaels. (c) Joseph Stalin and Sadam Hussein. (d) Adam Smith and John Stuart Mill.

220. Robert Thomas Malthus disagreed with the argument that supply creates its own demand so that demand will always adjust to supply. Malthus asserted that common occurrences in markets for goods would be “underconsumption” and consequent: (a) excess demand. (b) shortages. (c) equilibrium. (d) gluts. (e) technological automation.

221. The idea that the problem of scarcity is best resolved by reducing wants so that they are consistent with the goods available is a part of the philosophy underpinning: (a) the Judeo-Christian heritage that dominates western society. (b) Karl Marx’s ultimate communist society. (c) aspects of Buddhism, Taoism, and Hinduism. (d) the golden age of Greece, during the times of Socrates, Plato, and Aristotle.

222. Three alternative sets of theories intended as foundations to explain property rights were respectively exposited by: (a) Talcott Parsons, Adam Smith and St. Augustine. (b) Thomas Malthus, Max Weber and Roberto Michaels. (c) Aristotle, Richard Cantillon and Robert Frank. (d) John Locke, Thomas Hobbes and Hugo Grotius.

223. The methodological squabble between Zeno and Heraclites hinges on whether (a) humans are innately acquisitive and self-interested – or are they primarily social and cooperative? (b) building blocks for all the universe consist of a variety of atoms, or earth, wind, and fire. (c) material goods or ideas are the primary forces determining historical change. (d) democratic governments or enlightened “philosopher kings” would set more optimal social policies. (e) the universe is essentially static, with most changes being relatively superficial, or dynamic, with few constants and significant and recurring disruptions.

224. Aristotle did not argue that: (a) charging usury – interest on loans – is both inefficient and unfair. (b) buyers and sellers both gain when exchanges are made voluntarily. (c) unnecessary exchange is facilitated by coined money. (d) international trade invariably enhances the wealth of both trading nations.

225. The highest level in Abraham Maslow’s “Hierarchy of Wants” is: (a) nirvana. (b) self interest. (c) security. (d) humanitarianism. (e) self actualization. (f) love and respect. (g) socialism.

226. Aristotle’s diamond-water paradox (“necessities” are often cheaper than “luxuries”), though partially explained by Adam Smith, is more fully resolved logically through application of the (a) income and substitution effects of price changes. (b) equimarginal principle. (c) utilitarian principle of the greatest good for the greatest number. (d) Cartesian syllogism cogito ergo sum. (e) wages fund theory.

227. Institutional arrangements intended primarily to facilitate trade are. (a) coalitions and treaties.(b) legal systems. (c) markets. (d) industries. (e) governments.

228. The word “economics” comes from the Greeks and means: (a) business management. (b) charging interest on loans of money. (c) household management. (d) financial management. (e) growth management.

229. The scholastic method stressed by some medieval theologians yields conclusions via: (a) inductive logic based on observable data. (b) a question and then an answer based on faith and authority. (c) questioning, prayer, and writing. (d) logical deduction.

230. During periods when they were developing their individual sets of theories, the pioneering analyst least likely to have formally used demand curves and supply curves to explain how relative prices are determined would have been (a) John Stuart Mill.(b) Antoine Augustin Cournot. (c) David Ricardo. (d) William Stanley Jevons. (e) Alfred Marshall.

231. Most classical economists opposed mercantilism and usually favored: (a) free trade. (b) wage and price controls. (c) national self-sufficiency. (d) trade quotas and tariffs. (e) protection for infant industries.

232. The idea that, on average, extra income means more to the poor than to the rich most conforms to the teachings/philosophy of: (a) Thorstein Veblen. (b) Friedrich Nietzsche. (c) Gautama Buddha. (d) Jeremy Bentham. (e) Nostradamus. (f) Adam Smith.

233. The most notable distinction between classical economics and neo-classical economics was incorporation of calculus into analyses, which revealed that optimality and efficiency require conformity with the (a) laws of supply and demand (b) equimarginal principle. (c) scholastic tradition. (d) thesis-antithesis-synthesis pathway.

234. Arsene Jules E. Dupuit proved that if the marginal cost of crossing a public bridge were zero, then at the margin the efficient “toll” for crossing the bridge is zero. It would be inefficient to charge a price equal to average costs to people who gained trivially or very little by crossing the bridge. Dupuit’s proposed mechanism to efficiently secure total revenue sufficient to pay for the construction and maintenance of the bridge was (a) progressive income taxes. (b) a per capita tax equal to total cost / population. (c) price discrimination charging higher tolls to more desperate users. (d) letting entrepreneurs bid for the right to build and operate the bridge, and giving the contract to the bidder who would charge the lowest toll.

235. The analytical case for unfettered international trade was made most strongly by: (a) Rev. Thomas Malthus. (b) Heraclites. (c) mercantilists. (d) David Ricardo. (e) Cornelius Vanderbilt. (f) Alexander Hamilton.

236. H. K. E. von Mangoldt was a pioneer in arguing that human progress arises primarily from (a) entrepreneurial innovation. (b) conflicts between socio-economic classes. (c) expansion of the production data base. (d) a tiny elite group of inventors.

237. In Alfred Marshall’s “immediate period” (in contrast to the short run or long run), prices for non-storable goods are determined solely by: (a) market demand. (b) a subjective labor theory of value. (c) minimization of production costs. (d) utility maximization.

238. “Dialecticism” as an evolutionary technique that humans use to understand the world and the universe was first developed by: (a) Karl Marx. (b) Georg Feurbach. (c) Eugen von Bohm-Bawerk. (d) Georg W.F. Hegel. (e) Leonid Kantarovich.

239. Economic theories about crime and punishment were least central to major analyses by: (a) Jeremy Bentham. (b) Gary Becker. (c) Edwin Chadwick. (d) Thomas Robert Malthus.

240. John Stuart Mill developed a theory that long run price level stability would automatically be achievable through market forces. His laissez faire theory of the supply of money is based on an assumption that: (a) government deficits and surpluses cancel each other out over the long run. (b) the long run supply curve for gold is roughly a horizontal line. (c) international trade is based on reciprocal demands and supplies. (d) “good money drives out bad.” (e) deflation is a result of “too much money chasing too many goods.”

241. The expenditure of scarce resources to capture a pure transfer is known as: (a) monopolization. (b) vertical integration. (c) franchising. (d) rent seeking. (e) dead weight loss.

242. The goal of mercantilism was: (a) to keep the working class down. (b) wealth accumulation. (c) prevention of surpluses of exports over imports. (d) an open, international economy. (e) replacement of feudal monarchies by commercial interests.

243. The belief that individuals can measure the satisfaction (utility) they derive from goods as easily as they can measure distances or weights is central to the analysis of consumption by (a) many late nineteenth-century economists, most notably William Stanley Jevons. (b) most early Austrian economists. (c) post-modern public choice theorists. (d) Walras, Pareto, and other members of the Lausanne school of thought.

244. David Hume and John Locke outlined an early version of the: (a) backward-bending supply function for labor. (b) permanent income hypothesis. (c) quantity theory of money. (d) utility of poverty.

245. Alfred Marshall formalized use of the analytical technique known as: (a) general equilibrium analysis (b) felicific calculus. (c) partial equilibrium analysis. (d) differential equations. (e) linear programming.

Section 2: True=T. False = F.

1. The utilitarian philosophy was formalized by a Jeremy Bentham, a prominent American lawyer who was one of the signers of the Declaration of Independence.

2. David Ricardo’s law of comparative advantage asserts that net gains from trade will be realized whenever the relative pre-trade production costs of various goods differ between countries.

3. Like almost all radical thinkers of his era, Karl Marx was extremely skeptical that capitalism was either especially efficient or productive.

4. The economic concept of a subsistence wage is based on assumptions similar to those serving as foundations for the biological S-curve used to illustrate Malthusian population theory.

5. Adam Smith, Thomas Malthus, and other early economists viewed population growth rates as changing according to the resources available, which caused business cycles.

6. While young, John Stuart Mill was convinced that the combination of David Ricardo’s theory of rent and his Iron Law of Wages rigidly determined the distribution of income in a market economy, but later Mill was influenced by his wife to believe, as had Hugo Grotius, that income and wealth can more-or-less be redistributed as society chooses.

7. According to the Quantity Theory of Money, in the long run real output is not affected by either the money supply or the price level.

Section 3: Essay: Restrict your answers to the space on the page on which they are printed.

1. List at least six sequential stages of development identified by Karl Marx, and briefly discuss how Marx perceived that dialectical processes operating through “internal contradictions” would result in the transition of at least one of these stages to the next stage. (32 points).

2. The idea that people try to maximize their net pleasure [their “utils” or jollies] while minimizing their pain has intellectual ancestry that dates from Epicurus through Bentham and down to the present. One major failing of classical economics was in the failure of classical economists to detail how people do this. Describe the advances in economic theory that helped later economists specify the mechanics of how people try to make themselves happy.

3. Briefly describe the major fundamental shortcoming of theories of price determination in England prior to roughly 1870, and explain what caused this failure.

4. Mercantilists advocated acquiring national wealth in the form of gold by consistently running balance of trade surpluses. Briefly describe how David Hume’s price-specie flow mechanism relies on an “invisible hand” that automatically makes mercantilist policies self-defeating. (24 points).

5. Briefly identify the basic motives economic theorists conventionally assume when attempting to explain human behavior. (I.e., describe homo economicus.)

6. Now differentiate this “economic” explanation of behavior from theories developed by two of the following groups of thinkers: (a) sociologists. (b) medieval scholastics. (c) cognitive psychologists. (d) evolutionary biologists. (e) cultural anthropologists. (f) behavioral psychologists. (g) sociobiologists. (h) eugenicists.

7. Describe and distinguish between three arguments offered by different social theorists as ethical foundations for private property rights.

8. R.H. Tawney elaborated in “Religion and the Rise of Capitalism” on the consequences of the Judeo-Christian belief that, after creating Adam and Eve, “God gave man dominion over all the heavens and earth.” Tawney asserted that this belief set the stage for the view that people can change the world as they choose, thereby highlighting one possible approach to resolving the problem of scarcity. Describe how aspects of Hinduism, Taoism, and Buddhism may suggest an alternative solution to the problem of scarcity. Do you think these differences in “world-view” significantly explain differences in the ways societies based on “eastern” cultures developed relative to the development paths followed by more “western” cultures?

9. Describe the analytical foundations of David Ricardo’s theory of the distribution of income.

10. Briefly outline the major arguments of at most four different theories about the source of property rights.

11. Describe A.A. Cournot’s approach to profit maximization for a monopolist.

12. Draw a curve consistent with the theories of Reverent Robert Thomas Malthus that relates total human population [the Y-variable] to time [the X-variable] after better technology or newly-discovered resources [new territory?] or technology become available at time 0. Draw a tiny circle and label it as point a to identify a point at which humans would be very prosperous, and a similar circle/dot labeled point b to identify a point at which average humans would be relatively miserable.

13. Provide an example that illustrates David Ricardo’s theory of comparative advantage, and identify more modern and comprehensive sources of potential gains from international trade.

14. Explain how W. S. Jevons used equimarginal analysis to explain individuals’ labor supply decisions.

15. Illustrate the critical concepts that underpin Thomas Malthus’s theory of population.

16. Identify at least two situations in which the “self-interest” assumption of standard economic theory appears (at least superficially) to have less predictive power than some standard assumptions that underpin a different approach (e.g., sociobiology, anthropology, psychology, biology, sociology, etc.).

Extra Credit: 5 points each: The 200X Nobel Prize for Economics was awarded to:

Section 4: Matching:

1. Neatly draw arrows to indicate whether these thinkers favored a relatively larger role for centralized decisionmaking (government) in economic decisionmaking or a relatively more limited one, with decentralized decisionmaking. 30 points

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