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History of Economic Theory & Method
N/A
10
Economics
Undergraduate 4
10/20/2014

Additional Economics Flashcards

 


 

Cards

Term
Define: Natural Law
Definition

 

Natural Law: all behavior that accorded with the laws of nature was considered to be morally justified, whereas behavior that was “unnatural” was morally wrong.

 

Term
Define Hedonism
Definition

Hedonism: the belief that it is morally good to pursue pleasure and minimize pain.



Modern idea:  Maximizing utility

Term
In order, name the 5 eras of the early economists
Definition

1. The Greeks & Romans

2.  The Scholastics

3.  Merchantilism

4. Liberal Precursors to Adam Smith

5.  Adam Smith

Term
What was the name of the first economics book ever written and who wrote it?
Definition

"Oeconomicus"

by
Xenophon

Term
Define: Isolated exchange
Definition

Isolated exchange:

 

One buyer ~ one seller

Term
In an isolated exchange (or bilateral monopoly) how did they know what the “price” should be, since there was no “going rate” or equilibrium?
Definition
The Greeks used a type of economics that was normative (as opposed to positive economics, which follows a cause and effect model).  With normative economics, it’s all a moral judgment call which uses “should” statements.
Term
Aristotle said since there is no idea of what the actual market value is on the goods, then “__________ __ _________” must be accomplished in order to satisfy both parties, which would split the social surplus equally. 
Definition

Aristotle: 

 

Resiprocity in exchange

Term
Define:  Reciprocity in exchange
Definition

Reciprocity in exchange: 


trade in goods and services should involve an exchange of equal value for both buyer and seller: each party to the transaction should feel that he received something of more or less equal value to what he gave up. Justice.

 

Term
Define: Aristotle's "Paradox of Value"
Definition

Aristotle's "Paradox of Value"

 

a distinction between use value and exchange value:

Use value is the value of a good in use, i.e., its intrinsic usefulness, (water)

 

           

Exchange value is the value of a good in exchange, i.e., the price at which it is exchanged (diamonds)

 

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