Review Questions for Midterm 2
1. According to Adam Smith, what is the difference between the market price and the natural price? Why is this distinction important?
2. Explain why Smith's value theory involved circular reasoning.
3. Why did Adam Smith believe wages would differ across occupations? What is the wages fund doctrine?
4. What did Smith think would happen to the rate of profit over time? What reasons did he give for his conclusion?
5. Explain Malthus' population theory. What policy implications did Malthus draw from this analysis?
6. Explain Malthus's theory of gluts. What policy conclusions did he draw from the analysis?
7. Explain Ricardo's theory of rent and the law of diminishing returns. What policy conclusions did he draw from this analysis?
8. Explain Ricardo's theory of comparative advantage.
9. Explain Ricardo's theory of distribution. Also explain why Ricardo believed that rent and profit are inversely related, and that that profit and wages are inversely related
10. How does hedonism differ from utilitarianism?
11. How did Bentham's utilitarianism lead him to egalitarian reform proposals? Why didn't he advocate complete equality of income?
12. According to J.B. Say, what was the fourth factor of production? How did the addition of this fourth factor of production this remove potential sources of class conflict from classical theory?
13. What is Say's law? What are the implications of Say's law?
14. Discuss Nassau William Senior's beliefs concerning positive and normative economics.
15. Discuss Nassau William Senior's views on the poor laws. What policies did he help to enact as a member of the Poor Law Inquiry Commission?
16. How did Nassau William Senior's views on rent differ from Ricardo's? How does this reduce class distinctions based upon the receipt of rent?
17. How do Mill's views on utility differ from Bentham's?
18. According to Mill, what are the three types of goods? Which is the most common?
19. What are Mill's views on government intervention?
20. Define and explain the following modes of production: Capitalism, State Capitalism, State Socialism, Utopian Socialism, Anarchism, Marxian Socialism (including the six stages of production), and Syndicalism.
21. What were Marx's views on the writings of Smith, Ricardo, Mill, Bentham, Say, and Senior? Why was he critical of much of what they wrote?
22. Explain Marx's theory of exploitation.
[Many of these are also homework problems]