Interdepartmental Studies 369 - B1
History of Economic Thought
Section A (10 points)
Do the following two questions. Each question is worth five points.
1. John Kenneth Gal
aith has been described as an iconoclast. Find and state a dictionary definition of this word and explain why it is appropriate to Gal
aith.
2. Consider the following quote from Brian Equator, a local policy analyst:
“Any decision regarding another lockdown here in Alberta must be made with an application of
the Pareto criteria. In this way, we can be sure that economic well being is being maximized.”
Do you agree? Briefly explain why or why not.
Section B (10 points)
Select the best answer to the following multiple choice questions.
1. Thorstein Veblen’s idea of "conspicuous consumption" was that
a. people buy expensive items because they want to display their wealth
b. in modern economies people lose control of their basic appetites
c. governments encourage consumption to maintain full employment
d. only luxuries yield consumer surplus
2. The approach that Wesley Mitchell took to the study of the history of economic thought could be described as
a. absolutist.
b. feeling that the separation between positive and normative economics did not actually exist.
c. relativist.
d. feeling that economists should focus upon abstract, theoretical models.
3. John Commons believed that
a. the capitalist system should be replaced with a technocracy.
b. economic activity results from the actions of groups that are guided and molded by the
working rules of going concerns.
c. the private market provides goods of low order of urgency.
d. the leisure class puts their time, money and effort are spent in an unproductive pursuit of
pecuniary emulation.
4. John Hobson
a. felt that society should be ruled by an elite consisting of engineers.
b. believed that governments should assume ownership of key industries.
c. believed that market prices were an accurate measure of welfare on the cost side but not on
the benefit side.
d. believed that direct social control should replace the private profit making motive in
industries.
e. all of the above.
5. According to A. C. Pigou, if a good is associated with an external economy, then
a. the private market will undersupply the good.
b. the private market will misallocate resources.
c. any misallocation can be co
ected by the application of a subsidy.
d. all of the above.
Section C (30 points)
Do the following two questions. Each question is worth fifteen points.
Question 1
Thorstein Veblen was a very harsh critic of what he termed “neoclassical” economics (i.e., the “mainstream” economics of his era, the economics taught by his professor John Bates Clark). Present a summary of Veblen’s critique focusing specifically on his conceptions of consumer and producer behaviour (as evidenced for example in his Theory of the Leisure Class and The Theory of Business Enterprise, respectively) noting how they contrast with the then prevailing neoclassical vision of the economy.
Question 2
Contrast Mitchell’s views on the causes and nature of business fluctuations with the views expressed by Irving Fisher.