Quiz 1: Fundamentals of Micro, Supply and Demand

Which of the justices is the foundation for the other justices?

Which of the justices “obliges strictly; it requires safeguarding property rights, paying debts, and fulfilling obligations freely contracted?”

______________ is the justice that regulates what the community owes its citizens in proportion to their contributions and needs.

Which word is defined as “a community of a higher order should not interfere in the internal life of a community of a lower order, depriving the latter of its functions, but rather should support it in case of need and help to co-ordinate its activity with the activities of the rest of society, always with a view to the common good.”

Which word is defined as, “a legal order and normative ideal within a society by which individuals and their various associations are given the maximum range of liberty in pursuit of their proper ends, with a minimum of interference from superior authorities, i.e., only to the extent necessary to orient general activity towards the common good, and governed by the principles of conflicting rights, prudence, and, ultimately, of charity.”

 

And

 

“The virtue that inclines one to co-operate with others in order to help make the institutions of society better serve the common good. While the obligation of social justice falls upon the individual, that person cannot fulfill the obligation alone, but must work in concert with others, through organized bodies, as a member of a group whose purpose is to identify the needs of society, and, by the use of appropriate means, to meet these needs locally, regionally, nationally, and even globally.”

Where do economic means acquire their value?

Economics and praxeology study

An opportunity cost is

The marginal cost is

Which is the best definition of Methodological Individualism?

“The law of returns states that with the quantity of complementary factors held constant, there always exists some optimum amount of the varying factor.” Which concept is the necessary implication of the definition above.

Aristotle’s mistake, which survived in some form for millennia, was his understanding of value theory where

Subjective theory of value implies

Comparative and Absolute advantage:

 

Assume Crusoe and Friday wish to maximize their production.

 

1 Coconut                  1 Fish

Crusoe            20 min                        20 min

Friday             30 min                        25 min

Who has the absolute advantage?

Comparative and Absolute advantage:

 

Assume Crusoe and Friday wish to maximize their production.

 

1 Coconut                  1 Fish

Crusoe            20 min                        20 min

Friday             30 min                        25 min

Looking at comparative advantage, who would produce what?

Why is barter inefficient?

When does exchange occur?

Cell phones are discovered to cause cancer, what happens to the supply OR demand for cellphones?

The price of Pepsi increases, what happens to the supply OR demand curve for Coke?

Milk becomes cheaper, an input for butter.  What happens to the supply OR demand curve for butter?

The price of peanut butter increases, what happens to the demand OR supply curve of jelly?  (Think of a peanut butter jelly sandwich)