1 1

1-1 Student: ___________________________________________________________________________ Rogene A. Buchholz and Sandra ...

2 downloads 474 Views 71KB Size
1-1 Student: ___________________________________________________________________________

Rogene A. Buchholz and Sandra B. Rosenthal, "Elements of the Market System" 1.

Buchholz says that exchanges will not take place unless there is A. An increase of value to both parties of the exchange B. An open and free market C. A low transaction cost D. Extensive advertising

2.

Buchholz suggests that property rights can be assigned to goods and services traded in the market because A. There is an extensive set of government regulations in place B. Technology exists to track ownership C. Goods and services can be divided into individual units that can be privately owned D. People can dispose of their income wherever they want

3.

The ban on the sale of drugs, Buchholz contends, is an example of A. Unfair restriction of the free market B. Moral reasons thought important enough to over-ride market forces C. The government retaining a monopoly over distribution of goods D. The power of special interest groups in contemporary society

4.

An assumption in capitalism is that workers will A. Do a fair day's work for a fair day's wage B. Unionize to exert greater leverage over employers C. Try to obtain the most advantageous terms for the sale of their labor D. Add sufficient value in their work that their employers will consider them indispensable

5.

One of the ways Buchholz describes profit is as A. Excessive return on investment B. The value added by labor on raw materials C. The disposable income of an investor D. A reward for the risks of bringing a good or service to the market

6.

The term 'Oligopoly' refers to A. Market dominance by one major firm B. Market dominance by a few large firms C. Government control of the means of distribution D. Government control of the means of production

7.

Buchholz contends that government regulation is appropriate to A. Fight the tendency of competitors to sink to the lowest common denominator of practices B. Encourage companies to do their best C. Control the behavior of employees that employers can't D. Discourage competition among companies in a free market

8.

Buchholz says that although companies may object to specific regulation, they have a common interest in A. Keeping the competitive game going B. Promoting oligopolies C. Preserving their privileged place in society D. Delaying the implementation of legislation that they disapprove of

9.

The market is based on a libertarian view of justice that, as described by Buchholz, suggests that people should be free to use their property to advance their own interests and that concerns for social justice are of no importance. True False

10. Business is regulated to constrain the tendency of competitive firms to become monopolistic. True False 11. Defenders of the free market are likely to claim that capitalism represents human nature in that humans generally want to improve their lot and increase their holdings, especially in a competitive way. Are people really like that? What evidence is there to support your claim?

12. The capitalist system appears to require constant and increasing consumption. That may include 'planned obsolescence' where we could perhaps make light bulbs that last for several years, but it is better for the economy to have ones that wear out and have to be replaced more often. (Soda cans have a life of hundreds of years if they aren't recycled, whereas cars wear out in about ten, too). Wouldn't it make more sense in the long run to have a stable sustainable economy, where we only consume as much as we replenish? Think of arguments on both sides of the issue.

13. Free markets value what is marketable - that is, commodities that can be bought and sold. Does it make sense to say that some things are literally 'priceless' not because they cost huge amounts but because they are not, and should not be on the market? If Bill Gates decided to buy the Mona Lisa and burn it because he likes the smell of old varnish in his open fire, is there any good reason to stop him? Presumably, we could gang together and try to offer him sufficient money so that he is indifferent between roasting old paintings and getting richer, but is it just a question of finding the right price for cultural or aesthetic items?

14. There is a notion called 'proxy' valuation, where we can put a price on items by saying what monetary amount is equivalent. Thus, if you broke your leg and won the lottery in the same week, what amount would you have to win to say it wasn't such a bad week after all? If that amount were, say, $5,000, would you object if I paid you $5,000 for the pleasure of breaking your leg? What is the difference in the two formulations?

15. Buchholz draws a distinction between consumer choice and consumer sovereignty. First, give an exposition of the distinction with reference to at least two examples. Then, explain the importance of such sovereignty in a free market system. Finally, pose at least one challenge to sovereignty and give reasons why it persuades you or why it doesn't.

16. Describe an instance of a negative externality not mentioned in the reading. Say why this effect may give a false impression to producers and consumers, and if there are any appropriate ways to remedy externalities.

17. What is a 'free rider'? Give at least two examples, and say what effect you think they have on individual choices about contributing to collective efforts. Are there ways society could deal with them?

18. What kinds of constraints do we put on the free market? Name at least two kinds of market failure, and say why some have argued for regulation. Argue for or against these two kinds of regulations, noting the best arguments that may be made against your case and why they don't convince you.

1-1 Key Rogene A. Buchholz and Sandra B. Rosenthal, "Elements of the Market System" Gibson - 01 01

1.

Buchholz says that exchanges will not take place unless there is A. An increase of value to both parties of the exchange B. An open and free market C. A low transaction cost D. Extensive advertising

2.

Buchholz suggests that property rights can be assigned to goods and services traded in the market because A. There is an extensive set of government regulations in place B. Technology exists to track ownership C. Goods and services can be divided into individual units that can be privately owned D. People can dispose of their income wherever they want

3.

The ban on the sale of drugs, Buchholz contends, is an example of A. Unfair restriction of the free market B. Moral reasons thought important enough to over-ride market forces C. The government retaining a monopoly over distribution of goods D. The power of special interest groups in contemporary society

4.

An assumption in capitalism is that workers will A. Do a fair day's work for a fair day's wage B. Unionize to exert greater leverage over employers C. Try to obtain the most advantageous terms for the sale of their labor D. Add sufficient value in their work that their employers will consider them indispensable

5.

One of the ways Buchholz describes profit is as A. Excessive return on investment B. The value added by labor on raw materials C. The disposable income of an investor D. A reward for the risks of bringing a good or service to the market

6.

The term 'Oligopoly' refers to A. Market dominance by one major firm B. Market dominance by a few large firms C. Government control of the means of distribution D. Government control of the means of production

7.

Buchholz contends that government regulation is appropriate to A. Fight the tendency of competitors to sink to the lowest common denominator of practices B. Encourage companies to do their best C. Control the behavior of employees that employers can't D. Discourage competition among companies in a free market

Gibson - 01 01 #1

Gibson - 01 01 #2

Gibson - 01 01 #3

Gibson - 01 01 #4

Gibson - 01 01 #5

Gibson - 01 01 #6

Gibson - 01 01 #7

8.

Buchholz says that although companies may object to specific regulation, they have a common interest in A. Keeping the competitive game going B. Promoting oligopolies C. Preserving their privileged place in society D. Delaying the implementation of legislation that they disapprove of

9.

The market is based on a libertarian view of justice that, as described by Buchholz, suggests that people should be free to use their property to advance their own interests and that concerns for social justice are of no importance. TRUE

10.

Business is regulated to constrain the tendency of competitive firms to become monopolistic. TRUE

11.

Defenders of the free market are likely to claim that capitalism represents human nature in that humans generally want to improve their lot and increase their holdings, especially in a competitive way. Are people really like that? What evidence is there to support your claim?

12.

The capitalist system appears to require constant and increasing consumption. That may include 'planned obsolescence' where we could perhaps make light bulbs that last for several years, but it is better for the economy to have ones that wear out and have to be replaced more often. (Soda cans have a life of hundreds of years if they aren't recycled, whereas cars wear out in about ten, too). Wouldn't it make more sense in the long run to have a stable sustainable economy, where we only consume as much as we replenish? Think of arguments on both sides of the issue.

13.

Free markets value what is marketable - that is, commodities that can be bought and sold. Does it make sense to say that some things are literally 'priceless' not because they cost huge amounts but because they are not, and should not be on the market? If Bill Gates decided to buy the Mona Lisa and burn it because he likes the smell of old varnish in his open fire, is there any good reason to stop him? Presumably, we could gang together and try to offer him sufficient money so that he is indifferent between roasting old paintings and getting richer, but is it just a question of finding the right price for cultural or aesthetic items?

14.

There is a notion called 'proxy' valuation, where we can put a price on items by saying what monetary amount is equivalent. Thus, if you broke your leg and won the lottery in the same week, what amount would you have to win to say it wasn't such a bad week after all? If that amount were, say, $5,000, would you object if I paid you $5,000 for the pleasure of breaking your leg? What is the difference in the two formulations?

15.

Buchholz draws a distinction between consumer choice and consumer sovereignty. First, give an exposition of the distinction with reference to at least two examples. Then, explain the importance of such sovereignty in a free market system. Finally, pose at least one challenge to sovereignty and give reasons why it persuades you or why it doesn't.

16.

Describe an instance of a negative externality not mentioned in the reading. Say why this effect may give a false impression to producers and consumers, and if there are any appropriate ways to remedy externalities.

17.

What is a 'free rider'? Give at least two examples, and say what effect you think they have on individual choices about contributing to collective efforts. Are there ways society could deal with them?

Gibson - 01 01 #8

Gibson - 01 01 #9

Gibson - 01 01 #10

Gibson - 01 01 #11

Gibson - 01 01 #12

Gibson - 01 01 #13

Gibson - 01 01 #14

Gibson - 01 01 #15

Gibson - 01 01 #16

Gibson - 01 01 #17

18.

What kinds of constraints do we put on the free market? Name at least two kinds of market failure, and say why some have argued for regulation. Argue for or against these two kinds of regulations, noting the best arguments that may be made against your case and why they don't convince you. Gibson - 01 01 #18

1-1 Summary Category # of Questions Gibson - 01 01 19