Econ434MC7A

Econ434MC7A - Topic 7: Marginalism: 1. The evolution of...

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Topic 7: Marginalism: 1. 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. 2. 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. 3. Several early contributors to the marginalist revolution identified an optimal or efficient point in an activity as achieved when the: (a) marginal social costs of the activity equal its marginal social benefits. (b) marginal benefits exceed marginal costs by the maximum amount. (c) the activity absorbs the minimum possible amount of time. (d) total benefit equals the activity’s total cost. 4. The equimarginal principle [also known as the law of equal marginal advantage ] emphasizes the idea that efficiency requires: (a) the fairness of the distribution of income to be judged by how close it comes to equality. (b) all identical resources to be allocated in identical ways. (c) deployment at the margin of equivalent resources in equivalently valuable ways. (d) marginal social benefit to most greatly exceed marginal social cost [MSB>MSC]. (e) wealth creation which entails maximizing “the greatest good for the greatest number.” 5. Economists who are most likely to emphasize the goal of efficiency and to ignore questions of equity would be those most heavily influenced by: (a) American institutionalists. ( b) neoclassical marginalists. (c) syndicalists. (d) German historicists. (e) Fabian socialists. 6. Theorists who formalized economics by rigorously introducing mathematics and then elaborating on the importance of marginal analysis would include: ( a) William Stanley Jevons, Carl Menger, Léon Walras, and Francis Y. Edgeworth. (b) German historicists and American institutionalists. (c) Isaac Newton, Richard Cantillon, John Law, and Albertus Magnus. (d) members of the Fabian and Utopian schools of thought. (e) Thomas More, Thomas Paine, Thomas Aquinas, and Thomas Malthus. 7. The “Marginalist Revolution” that attacked economic analysis with calculus early in the nineteenth century is most consistent with the stress on formal mathematics and detailed statistics in the earlier writings of: (a) Claus von Clausewitz. (b) John Law. (c) Friedrich List. (d) William Petty. (e) Bernard Mandeville. 8.
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Econ434MC7A - Topic 7: Marginalism: 1. The evolution of...

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