Test Answers on Economics – Flashcard
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Chapter 11 is "The Belief in Luck," chapter 10 is "Modern Survivals of Prowess," and chapter 5 is "The Pecuniary Standard of Living." This work used Darwin's theory of evolution to analyze the modern industrial system, and its author claimed that industry demanded diligence, efficiency, and cooperation among businessmen. Instead, the author witnessed predatory tactics and what he termed "conspicuous consumption." FTP, identify this theoretical 1899 work of Thorstein Veblen.
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The Theory of the Leisure Class
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Talk about a cosmopolitan background: he was born in Russia, educated in Germany, and advised the Chinese government before emigrating to the U.S. and becoming a Harvard professor -- at age 25. An expert in national planning, he's best known for developing the input-output theory of economic analysis. FTP name the author of The Structure of the American Economy, winner of the 1973 Nobel in Economics.
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Wassily Leontief
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It opens by stating, "The power to become habituated to his surroundings is a marked characteristic of mankind. Very few of us realize with conviction the intensely unusual, unstable, complicated, unreliable, temporary nature of the economic organization by which Western Europe has lived for the last half century." It attacked its subject for abandoning the low tariffs and the gold-based economy that existed before 1914, and its author predicted the German economic weakness that was to result from the impossibly high reparation payments. FTP, identify this treatise on the repercussions of the Treaty of Versailles, written by John Maynard Keynes.
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Economic Consequences of the Peace
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This author, now associated with the Yale University Law School and the University of San Francisco, has written numerous books addressing such topics as free enterprise, human values, democracy, and big business. In a 1996 interview with Jerry Brown, he commented on the "organized corporate economy...that ignores values that don't have a price tag on them." FTP, identify this author of Sorcerer of Bolinas Reef, Opposing the System, and, most notably, Greening of America.
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Charles Reich
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Assume there is a limited supply of two goods X and Y, and two consumers A and B. With the origin at q(x) and q(y), plot B's indifference curves on the negative X, negative Y plane, and with the origin at 0,0, plot A's indifference curves on the X, Y plane. Assume that any intersection of points represents a possible bundle of goods held by the two consumers and you have, FTP, what type of box, useful for determining Pareto efficient allocations?
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Edgeworth box
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His most famous work bore the Latin motto "Natura non facit saltum," or nature makes no sudden leaps. Though it never appeared, the second volume of that monumental work was to have covered foreign trade, money, and taxation. FTP, name the Cambridge professor who introduced the concepts of elasticity of demand and equilibrium in the short and long runs with the 1890 publication of Principles of Economics.
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Alfred Marshall
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His namesake paradox, which resulted from a study of the Hecksher-Ohlin theory, states that, in the U.S., capital rather than labor is the relatively scarce factor of production. After serving as an advisor on railroad construction to the Chinese government, he emigrated to the U.S. in 1931. While at Harvard, he was credited with the development of linear programming in economics, a vital tool in his system. The core of that system is a grid like table showing what individual industries buy from and sell to one another. FTP, identify this formulator of input-output analysis, the Russian winner of the 1973 Nobel Prize in economics.
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Wassily Leontief
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After studying at Rutgers and the University of Chicago, he received his Ph.D. from Columbia University and joined the faculty of the University of Chicago in 1946. Together with his wife Rose he advocated a negative income tax to supersede centralized social welfare services, which he claimed hurt traditional values of individualism and useful work. His works include Capitalism and Freedom, Monetary Trends of the United States and the United Kingdom and A Monetary History of the United States. FTP, name this winner of the 1976 Nobel Prize in Economics.
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Milton Friedman
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Its 130 members are divided into several groups: the elite Ministerial Conference, the broader, Geneva-based General Council, and specialized working groups like the Goods Council, Services Council and Intellectual Property Council. It was formed as the successor to, and implementer of, GATT during the Uruguay Round of negotiations between 1986 and 1994. FTP, what organization, which regulates international commerce, had a controversial meeting in Seattle in 1999?
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the World Trade Organization or WTO
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This work contained the argument that society was divided into three classes-the landlords, the workers, and the owners of capital. Drawn on extensively by various philosophers and economists with highly disparate views, it elaborated various economic principles, perhaps most famously the theory of comparative advantage. FTP, name this 1817 work, the masterpiece of David Ricardo.
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Principles of Political Economy and Taxation
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This Nebraska native graduated from Berkeley in 1942 and then studied under Paul Samuelson at MIT. In 1968, he became Benjamin Franklin Professor of Economics and Finance at the Univ. of Pennsylvania where he developed his "Wharton Models" which found wide use in forecasting GNP, exports, investment, and consumption. He followed that with the more daring LINK project. FTP, name this economic adviser to Carter and winner of the Nobel Prize for Economics in 1980.
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Lawrence Robert Klein
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A strong nation, according to theory, was to have a large population, which would provide a supply of labor, a market, and soldiers. Proponents of the doctrine were Thomas Mun, Jean-Baptiste Colbert, and Antonio Serra, but the term was not coined until a Scottish economist published his most famous work in 1776. FTP, name this economic theory in which governmental regulation of a nation's economy was designed to enhance state power at the expense of rivals.
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mercantilism or mercantilist theory
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The beneficial type of this concept would be produced by such factors as the development of an AIDS vaccine, a better educational system, or a more efficient highway system. Costs of this type are not factored into the GDP; therefore, the GDP overstates economic welfare. FTP, name this economic concept in which a third party is affected by production or consumption of a commodity.
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Spillover or Externalities
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Educated at the University of Oslo, this economist was a pioneer in the new science of econometrics. In 1930, as visiting professor at Yale University, he founded the Econometrics Society, and was the editor of their society journal until 1955. FTP, identify this Norwegian economist who, with the Dutch economist Jan Tinbergen, shared the first Nobel Prize in economics in 1969.
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Ragnar Frisch
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In the extended title of his most famous work this economist claims to respond to the speculations of William Godwin and the Marquis de Condorcet. From 1805-34 professor at the East India Company's college at Haileybury, he wrote 1820's Principles of Political Economy and An Inquiry into the Nature and Progress of Rent, but is best-known for a 1798 work in which he uses the argument that one element of society increases at an arithmetic rate, while another increases at a geometric rate, implying the need for moral restriant, crime, disease, war, and vice. FTP, who was this author of An Essay on the Principle of Population?
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Thomas Malthus
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His theoretical work on inequality provided an explanation for why there are fewer women than men in some economically disadvantaged countries. This study is included in the work _Collective Choice and Social Welfare _ in which he argues that social reform must precede economic growth. His other important work was inspired by his own experience in Bengal during the 1940s and is called _Poverty and Famines: An Essay on Entitlement and Deprivation _. FTP identify this noted economist whose work to help the poor earned him the Nobel Prize in 1998.
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Amartya Sen
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The theory behind this basic concept has been augmented in the 20th century by the pioneering work in indifference analysis of Edgeworth, and its first formulation can be attributed to William Stanley Jevons. It grew out of speculations about the origins of price and the paradox of value, seen in the lesser of cost of bread than diamonds, which implied the need to consider scarcity in determinations of price. FTP, identify this basic economics concept which is defined as the additional benefit that the consumer acquires from the purchase of an additional unit of a commodity.
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marginal utility
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The eleventh chapter of this work declares gambling a "subsidiary trait of the barbarian temperament," and is entitled "The Belief in Luck." It expounds on society's "need" for fashionable clothing in the chapter entitled "Dress as an Expression of the Pecuniary Culture", while the introductory chapter describes the namesake social stratum and attempts to account for their seemingly wasteful expenditures, as detailed in the chapter entitled "Conspicuous Consumption." FTP, identify this seminal 1899 work of economics by Thorstein Veblen.
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The Theory of the Leisure Class
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The curve representing this quantity is always downward sloping due to Pigou's wealth effect, Keynes' interest-rate effect, and the Mundell-Fleming exchange-rate effect. In the Mundell-Fleming model, it can be stated by an equation that relates consumption as a function of disposable income and investment as a function of interest rates, net exports, and the GDP, all of which, when added together, equal the total income or output. FTP, what is this economics concept that represents the total demand for goods and services in an economy?
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aggregate demand
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Formally, this economics term is defined as the difference between the total return from a factor of production and its supply price; that is, the minimum amount necessary to attain a factor of production. Alfred Marshall analysed the "quasi" version, while the traditional use of this term refers to the special case of a specific factor of production which is always present in a fixed quantity and therefore has zero supply cost. FTP, identify this term, most commonly used to refer to the price paid for use of land.
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economic rent
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This work refers to the "big three", and indicates that the typical institutional units have become enlarged, administrative, and in the power of their decisions, have become centralized. The author defines those "big three" as the government, the political order, and the military order. In the final paragraph, the author calls most of the people "trusting children," who must put all the executive power in the titular group. FTP, name this work that claims the U.S. is run by a small ruling class, a 1956 text by C. Wright Mills.
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The Power Elite
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His eponymous curve shows a U-shaped relationship between GDP and income inequality, while his eponymous 18-year cycle, which he postulated after studying American real estate data, relates to the variation of growth rates. Most of his research was historical in character, including the finding that per capita growth rates had long been very similar in the United States and Europe in his work National Product since 1869. FTP, name this Ukrainian-American economist whose demonstration of the lack of a relationship between population growth and per capita GDP growth helped win him the 1971 Nobel Prize.
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Simon (Smith) Kuznets
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His series in The Dial entitled "The Modern Point of View and the New Order" was later published in book form as The Vested Interest. He harshly criticized business involvement in universities in The Higher Education in America and claimed that modern wars were caused by competing national business interests in An Inquiry into the Nature of Peace. These themes were also the focus of his The Instinct of Workmanship and the State of the Industrial Arts. FTP, name this economist, who coined the term "conspicuous consumption" in his seminal The Theory of the Leisure Class.
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Thorstein Bunde Veblen
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It was originally presented to the annual meeting of the American Society of Mechanical Engineers, although the repercussions of its publishing were felt more elsewhere. Taking an example of men who lugged pig-iron at the Midvale Steel Company, the author applied time and motion studies to determine the best method for performing a task in the least amount of time. This collection of essays is primarily concerned with improving worker output by providing adequate education and fostering cooperation. Published in 1911, FTP, name this landmark in management theory by Frederick Taylor.
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Principles of Scientific Management
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Several criticisms make its application difficult. First, imperfect information will prevent the bargaining for entitlements, resulting in Prisoner's Dilemma-type scenarios. Second, monopolies, such as the railroad company whose sparks set fire to cornfields, will not necessarily behave competitively. Third, some externalities, such as the depletion of the ozone layer, affect too many people to make satisfactory legal transactions practical. These are all problems with, FTP, what theorem that deals with the joint relationship between "polluter" and "victim" and is named for the 1991 Nobel economics laureate?
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Coase Theorem
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In his autobiography he tells of how as a 16-year old he had a blind date with soap opera actress June Rose, whom he married five years later. In his adult life he co-founded the investment firm Long-Term Capital Management and wrote the seminal Continuous-Time Finance. However, he is best-known for his work on the mathematics of derivative securities. FTP, name this economist who built upon the Black-Scholes formula in his work on option valuation and shared the 1997 Nobel with Myron Scholes.
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Robert C. Merton
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Adam Smith divided an elementary representation of it into effective and absolute classes, of which effective was the more important for determining the market price of a good in relation to the cost of producing it. Theories of revealed preference relate it to the individual consumer's preference, while its price elasticity measures how much more or less of a good the consumer will purchase given a decline or a rise in price. FTP name this relation used with supply to determine the equilibrium price and quantity of a good in a market.
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Demand
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His first work accused his colleagues of "mental gymnastics" for rejecting mathematics to unify economic analysis. As consultant to the Committee of Economic Development in 1958, he answered the question "What is the most important problem to be faced by the U.S. in the next 20 years" with "inflation." Some of his recent works have attempted to describe Keynesian Economics with linear programs. Remembered for his "cost-push" inflationary theory, FTP, name this co-author with Nordhaus of Economics: An Introductory Analysis, a professor at MIT who won the Nobel Prize for Economics in 1970.
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Paul Samuelson
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An extramarital affair partially prompted his critique of the conflict between eroticism and religion in the essay "Religious Rejections of the World and Their Directions". The emotional domination exerted on him by his father led both to his 1898 mental breakdown and his advocacy of "Liberal Imperialism" to solve Germany's agrarian problems in his famous Freiburg Address. He gained fame for his analysis of German political and economic life in Economy and Society, but is more famous today for his investigation of the roots of the "spirit of capitalism". FTP, who was this German thinker, author of The Protestant Ethic?
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Max Weber
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A major innovation in the analysis of this concept was the conjectural variation due to Bowley, which anticipated the so-called "sophisticated" seller analysis known as Stackelberg's Model. The assumption that the seller will not have to deal with an independent change in market price is central to Bertrand's Model, which was intended to refute the original treatment of this concept developed by Antoine Cournot. FTP, what is concept describing a market state in which there are only two firms?
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duopoly
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The fourth section of chapter one concerns the "fetishism of commodities and the secret thereof", while chapter four provides a "general formula" for the titular subject while analyzing what the author designates as the C-M-C and M-C-M forms of circulation, the latter representing the desire to accumulate money for its own sake. Putting forth a controversial theory of commodity value in which a commodity is said to be worth the labor that went into it, the author then uses this theory to claim that employers can pay laborers less than the value of their labor since the employers control the "means of production". FTP, what is this work of economics by Karl Marx?
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Das Kapital
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For a normal good the right side is negative. For Giffen goods it is positive. The right hand side has two terms that display the effect of the changing price, the resulting calculation of which gives the slope of the Marshallian Demand Curve. FTP, name this equation important in Microeconomic analysis that breaks total observed effect on demand due to a price change into substitution and income effects, named for a Russian Economist.
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The Slutsky Equation
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A cofounder of the New School for Social Research, he resigned from the Political Science department of Columbia University in 1917 to protest the dismissal of pacifist professors. Considered a radical early in his career, he would be reviled by liberals for his strenous opposition to FDR's administration. The author of such political science tracts as American Government and Politics, he collaborated with his wife Mary Ritter on The Rise of American Civilization and America in Mid-Passage. Robert Brown's critique of his most famous book centered on a failure by this historian to understand the nature of colonial finance. FTP, name this author of An Economic Interpretation of the Constitution of the United States.
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Charles A. Beard
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Its namesake began his economic studies on the "nature of the firm" and its relation to transaction costs. First presented in the 1960 essay "The Problem of Social Cost" it argued against Pigou and stipulated that the manner in which a property right is initially assigned will not affect the efficiency of resource allocation. FTP identify this theorem named after a member of the Chicago School who won the Nobel Prize in 1991.
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Coase's theorem
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It ends with a discussion of learnedness and education as ritualistic and an example of "archaism and waste." Women are discussed in the section on dress, where the author notes that vestigial "predatory barbarism" dictates that functional clothes are not fashionable. Indeed, the title group believes in luck and tries to emulate in a "pecuniary fashion." The author cites the division of labor for precipitating the rising distinction between industrial and non-industrial employments a fact that allows certain members of society to conspicuously consume. These ideas, FTP, are put forth in what 1899 work, subtitled an Economic Study of Institutions, written by Thorstein Veblen.
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Theory of the Leisure Class
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At this man's dissertation defense, Schumpeter asked Leontieff, "Well, have we passed?" Responsible for the modern theory of production, in his most famous work he described the envelope theorem and characterized the cost function. With Robert Solow he posited the "Non-Substitution" theorems, and wrote Linear Programming and Economic Analysis. He also discovered the Factor Price Equalization theorem in international trade, and was responsible for the theory of revealed preference. For 10 points, name this MIT economist who wrote Foundations of Economic Analysis, a neoclassical econ textbook.
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Paul Samuelson
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His second volume Industry and Trade discussed business organizations, and he would later argue the idea of time analysis as a way to reconcile cost of production with marginal utility. Other works include Money, Credit, and Commerce, and an 1890 magnum opus that introduced concepts like elasticity of demand, consumer's surplus, quasi-rent, and the representative firm. FTP identify this pioneering British thinker and author of Principles of Economics.
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Alfred Marshall
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Regular practitioners include pharmaceutical companies, airlines, and sports arenas; it is of extremely limited utility to small businesses and in perfectly competitive industries, or when its effectiveness can be curtailed via arbitrage. To achieve universal service, AT&T used to employ it against urban, heavy, and business users. Amazon.com, amid much outrage, experimented with what it called "dymanic pricing" in 2000. FTP, what is this general term for charging different customers different rates?
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price discrimination
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Although its criteria are generally thought to be positive rather than normative, they are often used as normative principles for justifying particular changes or refusals to make changes. Its creator supposed that utilitarian addition of welfare across individuals is meaningless, and that the only useful aggregate measures of welfare must be ordinal. Defined as the state of affairs in which no one can be made better off without making someone worse off, FTP, identify this optimality named after an Italian economist.
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Pareto efficiency or optimality
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He introduced the "liquidity trap" featured in his neo-Keynesian work Mr. Keynes and the Classics. He attempted a restatement of the marginal productivity theory in his 1932 Theory of Wages and coined the term "elasticity of substitution." In a paper with R. G. D. Allen, he introduced the Slutsky decomposition of demand into substitution and income effects and developed the IS-LM model, but he is better known for his Value and Capital, in which he established the foundations for general equilibrium theory. FTP, identify this economist that shared the 1972 economics Nobel with Kenneth Arrow.
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Sir John Hicks
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First introduced in the Journal of Political Economy in 1973, it can be derived from binomial pricing schemes and is now often used to obtain the implied volatility of a stock from the value of the calls on that stock. Its inputs are time to expiration, strike price, value of the underlying asset, implied volatility of the underlying asset, and the risk-free interest rate, while the output is the value of the call option. FTP, what important option-pricing formula won Robert Merton and Myron Scholes the 1997 Nobel Prize after its more important co-creator died two years earlier?
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Black-Scholes-Merton option pricing model
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The introductory section bears a brief verse dialogue between Spirit of the Years and Spirit of the Pities. Chapter III is entitled "The Conference," where its author notes that it is of historical importance that Vittorio Orlando and Woodrow Wilson had no common language. Chapter V, "Reparation," discusses the flawed fiscal policy implemented after World War I, and Chapter VII, "Remedies," makes suggestions to the potentially dangerous situation that the author predicts will arise in Germany. FTP, what is this work by John Maynard Keynes that trashes the WWI Paris Peace Conference?
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The Economic Consequences of the Peace
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The reasons for its downward slope include Pigou's wealth effect, Keynes' interest rate effect, and the Mundell-Fleming exchange-rate effect. Both the IS-LM model and the Mundell-Fleming model provide definitions for this concept, the latter of which involves consumption as a function of disposable income, investment as a function of the interest rate, government spending, net exports as a function of the real exchange rate, and the income or output. FTP, identify this macroeconomic concept that tells the quantity of goods and services demanded at a given price level.
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aggregate demand
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Under antitrust policy, any merger that increases this number by more than 100 or causes its value to exceed 1000 is considered anticompetitive, as it is below 1000 for an open market. It is above 1800 for a concentrated market and equal to 10,000 for a pure monopoly. It is calculated by taking the sum of the squares of each firm's market share. FTP, name this index which measures the degree to which an industry is concentrated in a particular number of firms.
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Herfindahl-Hirschman index
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A firm with this relationship to labor faces an upward-sloping supply curve for labor, which means that a minimum wage may increase employment, and the firm may reduce the quantity of labor it demands as a way to force down the equilibrium wage. Examples include pro sports organizations and companies who set up company towns. A bilateral monopoly exists when a monopoly exists on the selling side and one of these on the buying side. FTP, name this market situation in which there is only one buyer.
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monopsony
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For simplicity's sake, economists often set this value equal to potential output under the flexible-price full-employment model. It is distinguished from a similar "net" calculation by failing to account for depreciation or consumption of capital. Intermediate goods do not contribute to this value in order to avoid overestimates, while reliability is achieved by ignoring household production. Formulated by Simon Kuznets, FTP, what is this value, the total market value of the final goods and services produced by a nation's economy in a given time?
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GNP or Gross National Product (accept Gross Domestic Product or GDP)
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He discussed theoretical psychology in The Sensory Order and attacked the idea that social scientists should adopt the methods of physical science in The Counter-Revolution of Science. The cousin of Ludwig Wittgenstein, his book The Constitution of Liberty included the misleadingly titled postscript "Why I am not a conservative," but this Austrian is best known for attacking Keynesian economics. For 10 points-name this economist who shared the Nobel Prize with Gunnar Myrdal, the author of The Road to Serfdom.
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Friedrich Hayek
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His "Essay on the influence of the Low Price of Corn" discusses theories that would lead him to oppose the Corn Laws as a Member of Parliament. He created a stir with his tract The High Price of Bullion, while his best work begins with comparisons of value in use and in exchange, and reasons that the interests of society are opposed by the interests of landowners, an idea central to his theories of economic rent. FTP, name this founder of the classical school of economics who proposed ideas like the iron law of wages in The Principles of Political Economy and Taxation.
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David Ricardo
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Keynes wrote a book whose title declared the "end of" this economic concept. Its greatest supporter in 19th-century Germany was Friedrich List, whose advocacy led to the establishment of the Zollverein system. In his Discourses Upon Trade, Dudley North gave an early development of it, although its name was not coined until almost a century later by Vincent de Gournay, one of the Physiocrats. It fell out of favor after the industrial advances of the late-19th century, a century after it was held to be the best way to encourage the workings of the "invisible hand" by Adam Smith. From the French for "let it be", FTP, what is this theory advocating no government interference in the economy?
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laissez-faire
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G.A. Hazelrigg attempted to apply it to optimal engineering design. Found in the 1963 publication Social Choice and Individual Values, it centers largely on the concepts of optimization and utility. It states that rankings of individual preferences will never necessarily correspond to those of societal preferences when there are more than two individuals and alternative choices. FTP, name this economic theorem, which won a share of the 1972 Nobel in Economics for Kenneth Arrow.
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Arrow's Impossibility Theorem (prompt on "Arrow's Theorem")
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He advanced the idea that economics should be understood like biological evolution, a method culminating in his partial equilibrium analysis. Studying economics for moral purpose, his most famous work advanced his form of welfare economics, as well as introduced the concept of price-elasticity of demand. His first published work was a review of the work of Jevons, while his first book, The Economics of Industry, was coauthored with his wife. He was unable to produce a follow-up to his major work, and instead published 1919's Industry and Trade, and 1923's Money, Credit and Commerce. FTP, identify this pioneering economist, known as the teacher of Keynes and author of The Principles of Economics.
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Alfred Marshall
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In its second chapter the author tries to offer a provisional definition of "traditionalism." Earlier, to come up with a formulation of one of the title concepts, the author presents a long excerpt of Benjamin Franklin's writings. Before addressing "The Religious Foundations of Worldly Asceticism," this text looks at the word "calling," specifically Luther's conception of it. FTP, name this 1904 work that attempts to link the title economic system with the title religion, the magnum opus of Max Weber.
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The Protestant Ethic and the Spirit of Capitalism
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The original introduction to this work described it as a "pamphlet" which the author wrote in his spare time. Chapters in this seminal text include "The 'Inevitability' of Planning" and "Economic Control and Totalitarianism". Towards the end, this work discusses the fall of Nazism and totalitarian regimes, and earlier extols the virtues of democracy, which promotes laissez-faire economic policy. Its first and most famous chapter, "The Abandoned Road", discusses the failure of socialism in the modern world. FTP, identify this most famous work of Friedrich von Hayek.
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The Road to Serfdom
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Various extensions to this idea were added by Jaroslav Vanek in the 1960s, and earlier by Paul Samuelson in the 1930s. It is based on four main theorems, two of which, the Rybczynski and Stolper-Samuelson theorems, describe various relationships between this model's variables, while the factor-price equalization and its namesake theorem discuss its key results. Also known as the factor proportions model, it proved invaluable in developing the input/output model of Leontief. FTP, identify this economic model named after two Swedish economists that discusses trade between two countries.
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Heckscher-Ohlin model
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the market period, the short period, and the long period - to understand how markets adjusted to changes in supply or demand. He originated the concepts of consumer surplus and producer surplus, as well as the price-elasticity of demand. Perhaps most famous for his theory of marginal utility, FTP, name this British economist and author of Principles of Political Economy.
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This man's early works include The Pure Theory of Foreign Trade and the article "Where to House the London Poor". He developed three periods
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Alfred Marshall
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The fact that ideas fall into this economic category is used as justification for intellectual property laws. They present an example of market failure: without intervention, a private producer has no motivation to produce them due to the free rider problem. These goods are nonexclusive and nonrival. FTP, identify these goods which tend to be provided by government, an example of which is law enforcement.
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public good
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During the 1930's the originator of this concept computed its value back to 1869. This data was used to support his 15-20 year namesake cycles of production and prices based on this quantity. There appears to be an inverted U-shaped curve between this figure and income inequality. When the value of unpaid housework was not used in computing the annual measurement, Simon Kuznets quit the Commerce Department in protest. FTP, name this figure defined as the sum of consumption plus investment plus government spending plus exports minus imports.
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gross national product or GNP
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Among the situations the author uses to make his points in this book are the plight of Irish prostitutes in London and the exploitation of Holland's fisheries. Book Five begins with a clarification on the expenses of maintaining both militias and standing armies; Book Two details the "nature, accumulation, and employment of stock;" and Book Four details the "systems of political economy." Its author advocated that government maintain a laissez-faire attitude and coined the principle of the "invisible hand" to elucidate this point. FTP, name this magnum opus of Adam Smith.
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An Inquiry into the Nature and Causes of the Wealth of Nations
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He had an early interest in psychology and later in his life discovered, contemporaneously with Donald Hebb, the synaptic connection model of the mind which he put forth in his 1952 work The Sensory Order. He is more famous in another field for which he developed his idea of a "spontaneous order" and wrote such works as The Pure Theory of Capital. His most famous work argues that state control of the economy leads to totalitarianism. FTP, name this man who shared the 1974 Nobel in Economics with Gunnar Myrdal and wrote The Road to Serfdom.
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Friedrich August von Hayek
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Assessed as a part of the Hecksher-Ohlin model, one analysis of this phenomenon is based on the labor theory of value, and it was included in the long 1817 work Principles of Political Economy and Taxation. Providing a strong argument for free international trade and specialization, it is ultimately little more than an analysis of relative opportunity costs. FTP, name this theory of David Ricardo explaining why trade of some goods may be more favorable for some countries due to production factors.
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comparative advantage
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It must have a positive slope, and because the factor it measures cannot be negative it must be concave up and cannot rise above the line y = x, known as the line of perfect equality. The area between it and the line of perfect equality is known as the Gini coefficient, and at each point its y-value shows the cumulative percentage of a given asset owned by the bottom x percent of the sample. First developed by its namesake American economist during the early-20th century, FTP, identify this construct from welfare economics used to illustrate income inequality.
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Lorenz Curve
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In the first chapter, the author respectfully criticizes William Godwin's position on the perfectability of man. As evidence, the United States, as well as Rome and the barbarians, are cited, and an oscillatory behavior is predicted for the title subject. The author takes two postulates, one being "that the passion between the sexes is" and the other being, "that food is necessary to the existence of man." FTP, identify this work which claims that the number of people increases geometrically while the food supply increases arithmetically, leading to massive starvation, written by Thomas Malthus.
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An Essay on The Principle of Population
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The most pessimistic predictor of behavior in it is the Bertrand theory. The presence of strategic behavior makes actions in it significantly less predictable than in its two alternatives. In the Cournot theory, as more firms enter the market, lower prices and profits result, leading closer to pure competition. Cartels may form in, FTP, what type of market with substantial economies of scale, high entry barriers, and few firms?
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Oligopoly
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This model's predictions fail in markets characterized by a strong endowment effect. Its predictions hinge on private organizations that impose negative externalities, eliminating the need for legislation, and thus invalidating Pigou's Theorem that only social cost need be paid. Its illustration involves tenants paid either for pollution or for non-production, resulting in identical solutions. Proposed in the essay "The Problem of Social Cost," FTP, name this theorem named by Stigler that states that an efficient outcome may be reached if transaction costs are negligible and property rights are well defined, regardless of property ownership.
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Coase's Theorem
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The Marshall-Lerner condition says that the sum of this quantity for home imports and foreign imports must be greater than 1. Affected by the availability of substitutes, degree of necessity, and time period over which it is calculated, isotropy can be achieved via the 'Arc' formulation of this economic quantity. Typically negative, one exception is Giffen goods for which this value is by definition positive. FTP, name this economic quantity which can be defined as the measure the responsiveness of the quantity demanded of a good to its price.
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price elasticity of demand
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Along with the labor theory of value, this theory was refuted by Eugen Bohm-Bawerk in his monumental Theory of Capital, while Karl Marx criticized Lassalle's advocacy of the Gotha Programme on account of it. It was initially used in order to criticize the Poor Laws, on the grounds that they would increase the population of labor, which would ultimately lead to more workers, and would both make the workers poorer and rich bankrupt. Assuming that workers are infinitely available, replaceable and interchangeable, this idea built on the work of Malthus. FTP, identify this theory that states that salaries would always converge to subsistence levels, posited by David Ricardo.
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Iron Law of Wages
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First described concretely by Robert Torrens in Essay on the External Corn Trade, one famous argument against it is the "infant industry" argument. When it is not being followed, the world is not operating on its PPC. Classically, it assumes that labor is the only input, that goods are homogenous across firms, and that transportation costs are negligible, meaning that it is profitable to export. With two or more countries, free trade then proceeds until the prices of exports are equal across countries. Frequently illustrated with the example of English cloth and Portuguese wine this is, FTP, what theory which states that countries should produce and export those goods which for them have the lowest opportunity costs.
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comparative advantage
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His work has recently been reintroduced into the field of modern organizational theory by Oliver Williamson. One of his works investigates the incentives involved in entrepreneurship, ignoring the advantage of non contractual relationships. The founder of the field of "New Institutional Economics", his did much of his early work on monopolies He identified the importance of transaction costs in "The Nature of the Firm", but he is better remembered for the ideas on property rights he espoused in "The Problem of Social Costs." FTP, identify this winner of the 1991 Nobel Prize, best known for his eponymous theorem.
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Ronald Coase
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identify this branch of microeconomics concerned with determining levels of production, consumption, and prices for all commodities in an economy simultaneously.
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Georgescu-Roegen criticized this as merely being an exercise in math, citing as an example a paper that assumed more traders than there are real numbers. The Sonnenschein-Mantel-Debreu theorem states that demand functions in these models can have arbitrary shapes. Arrow and Debreu introduced the modern "neo-Walrasian" ideas of how to build them. These models posit that every goods market is embedded in a larger economy and so the supply and demand curves affect each other. For 10 points
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general equilibrium theory (do not prompt on partial answer)
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The Benini coefficient is a surface description of patterns of this phenomenon whose occurance the Featherman-Jones-Hauser hypothesis attempts to explain. The Blau-Duncan model was previously used an example of it within the status-attainment tradition. Durkheim claimed that a high vertical rate of it would lead to individual and society anomie, while the earliest theory for it may be Vilfredo Pareto's circulation of elites. FTP, name this sociological term which refers to the shifting within a system of social stratification.
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Social Mobility
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Henry George suggested in Progress and Poverty that a tax on land alone can eliminate this. It cannot be eliminated during ordinary taxation, though it is minimized when supply is relatively inelastic. On a supply and demand curve, this is represented by the area taken away from producer and consumer surplus that does not go to the government. FTP, what is this fall in total surplus from when a tax is issued in an economy, changing the market outcome?
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deadweight loss
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Walter Nicholls joined this group after being persecuted for his statements about margarine. Its distinct character is considered to have begun with Frank Knight and Jacob Viner, as well as the "Mathematical Trio" of Lange, Schultz and Douglas who imitated work done at Lausanne. Mathematically, they prefer results-oriented partial equilibrium analysis to more math-dependent general equilibrium. George Stigler is the lesser-known cofounder of its second iteration and the creator of search theory, while this group also invented human capital theory and transaction cost theory, under Ronald Coase. FTP, Milton Friedman is one of eight economics Nobel prize winners from what school, associated in ideological terms with neoclassicism and in physical terms with the actual economics department of its Midwestern university?
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Chicago school of economics [more or less indistinguishable from the actual University of Chicago Department of Economics, so you can accept that]
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The classical conception of this phenomenon presupposes that labor is the only factor of production, there are no transport costs, and there is full employment. Because it implies that technological superiority is not a guarantee to continued success of a business, it is used to show how third-world countries can compete in the free market. First described by Robert Torrens in his Essay on the External Corn Trade, it was explored mathematically using the example of English cloth and Portuguese wine in On the Principles of Political Economy and Taxation by David Ricardo. FTP, name this theory which shows that two countries can achieve greater total efficiency by each specializing in certain goods, even if one country has an absolute advantage in the production of all goods.
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comparative advantage
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A 1947 study by George Stigler analyzed this type of situation and called into question the curve primarily associated with this entity. That hypothesis was introduced in 1939 by Paul Sweezy in a paper about demand under this condition, which suggests that any participant in one of these envisions two different demand schedules for its output. Edward Chamberlin proposed a model to understand these situations, which was a revision of the solution outlined by the French economost Antoine Cournot. FTP, name this market situation in economics in which there are a few non-collusive, independent sellers.
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oligopoly
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He wrote an economic history of Roman agrarian society and a tract on the dual roles of idealism and materialism in Economy and Society. His vershtehen doctrine said that researchers must interpret people's actions using "ideal types" to understand social and economic phenomena, and his dabblings in positivism signaled his split from Gustav von Schmoller. He also studied the workings of bureaucracy and gave the Freiburg Address. His trademark work describes how Calvinist values, especially dedicating oneself to his duties, resulted in greater economic productivity. FTP name this author of The Protestant Ethic and the Spirit of Capitalism.
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Max Weber
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He argued for the "need for a sociology and psychology of social science and scientists" in an essay collected in his late volume Against the Grain. His early theoretical work includes lectures, collected under the title Monetary Equilibrium, that distinguished between ex ante and ex post investment. Later he rejected the neoclassical school in favor of institutional studies, illustrating his pessimistic Malthusian view of developmental economics with an "inquiry into the poverty of nations" entitled Asian Drama. He denounced the Agricultural Adjustment Act's impact on the cotton industry, expounding his theory of "cumulative causation" in a work subtitled The Negro Problem and Modern Democracy. FTP name this Stockholm School economist, author of An American Dilemma and co-winner of the Nobel Prize with Friedrich von Hayek.
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Gunnar Myrdal
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One of them argued that there are three kinds of art: productive, sterile, and social. Another of them wrote The Natural and Essential Order of Political Societies, while another edited such journals as the Ephemerides of the Citizen. Yet another one wrote The Friend of Mankind, which became his personal motto. In addition to Nicholas Baudeau, Mercier de la Rivière, Pierre-Samuel Dupont de Nemours, and Victor de Mirabeau, this group's members included Vincent de Gournay, who coined their most famous slogan. Their leader was a man who wrote articles on "grains" and "farmers" for the Encyclopedia, and expounded his views in the Economic Table of 1758. FTP, name this group of thinkers who believed in "laissez-faire" economics, who were led by Francois Quesnay.
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the physiocrats
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The process resulting from the convergence of income in this principle as time approaches infinity is termed the Kahn-Clark Sequence. It is initiated when a system's member banks develop an ability to lend significantly in excess of their reserves, leading to an expansion in money supply. Its negative version is usually brought about when increased imports shift the IS curve to the left. Calculated as 1 over 1 minus the marginal propensity to consume, FTP, what is this effect in which small initial changes in aggregate demand in a single economic sector produce further rounds of spending and greater income?
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multiplier effect
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He attempted to rework Sidgwick's philosophy from the perspective of Fechner's psychophysics in his first book, New and Old Methods of Ethics. His major book wasn't much noticed until the 1950s, when Shubik and Scarf took up his notion of "final settlements" in their work on game theory. Two years after publishing that major book, he shifted gears and devoted himself to mathematical statistics, which led to his becoming the first editor of the Economic Journal. The concepts of offer, contract, and indifference curves were all introduced by him, as was the general utility function, and he anticipated the Pareto optimum in 1881's Mathematical Psychics. FTP, name this student of Jevons, a British economist best known for his eponymous box.
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Francis Edgeworth
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One problem in testing this theory is that serial correlations may be the result of time varying rates and premiums. Technical analysis assumes that market action discounts everything, and that certain price formations are recurrent, thus violating a form of this theory. Another challenge to this theory is posed by possible limits to arbitrage and human psychology, the tenets that underlie behavior finance. Developed by Eugene Fame, the theory comes in three varieties. The weak form asserts that all past market prices and data are fully reflected in securities prices. The semistrong form claims that all publicly available information is reflected in securities prices, while the strong form argues that all information is reflected. FTP, identify this economic theory which claims that predicting the market on a long term basis is impossible.
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the Efficient Markets Hypothesis
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His article "Monopoly" proposed the concept of conjectural variations to connect various imperfect competition theories. In his Theory of Wages, he restated the marginal productivity theory, and he introduced the Slutsky decomposition of demand into income and substitution effects. His work in welfare economics produced his namesake compensation criteria for ordering allocations and 1956's Revision of Demand Theory. In his Contribution to the Theory of the Trade Cycle, he introduced a Harrodian multiplier-accelerator system with ceilings and floors, and his 1937 paper "Mr. Keynes and the Classics" proposed his liquidity trap and IS-LM model. Probably his most famous work, which laid out the conditions for stability of general equilibrium, is 1939's Value and Capital. FTP name this economist who shared the 1972 Nobel Prize with Kenneth Arrow, also the namesake of a demand curve based solely on substitution effects.
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John Hicks
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Joseph Schumpeter referred to it as "trivial," and its application in early 19th century Canadian history can be seen to falsify the Staple Theory. The first form of this principle was stated by Theognis in his Maxims. The first person to call this idea by its current name was Henry Dunning Macleod, while a medieval discussion of it can be found in a treatise by Nicholas Oresme (oh-rem). Rolnick and Weber argue that the reverse of this idea is demonstrable in countries with weak economies, especially if the use of paper currency is declared illegal. In order for it to apply in modern cases, legal tender laws must establish that fiat money is equally valid, in which case the buyet will offer it in place of commodity money. Named for a 16th century English merchant, FTP, name this economic law which states that bad money drives good money out of circulation.
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Gresham's Law
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Fishburn proved it false in an infinite case, while Armstrong proved the same result even when profiles are restricted to those which use a Boolean algebra of coalitions. One consequence of it is the Gibbard-Satterthwaite Theorem, which deals with the concept of non-imposition, or the inclusion of a potential for every result. Underpinning this theory is the concept of unrestricted domain, and excluding the Smith set, some methods can meet all the criteria that it demands. Amartya Sen famously tried to disprove by using utility analysis. If it did not hold, a mapping function would have two properties, one of which is monotonicity, or the inability to hurt an option by ranking it higher. That function would map individual preferences to societal preferences. First posited in 1951's Social Choice and Individual Values, FTP, name this theorem, which states that no set of rules for social choice can be achieved that satisfy all reasonable criteria of society, named for a 1972 Nobel Prize-winning economist.
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Arrow's Impossibility Theorem
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Because one of the elements plotted on this curve cannot be negative, the curve must be increasing and convex to the y axis. The creator of this curve was inspired by his teacher Richard Ely at the University of Wisconsin. Ely's book, Studies in the Evolution of Industrial Society, discussed "concentration and diffusion" as a central problem in economic analysis. An early alternative to this curve was proposed by George Holmes, but the originator of this curve objected, noting that the difference between two medians depends on the total level of income. The curve plots along the x axis cumulative percents of the population from poorest to richest, as compared to the cumulative percent of income each group holds. FTP, identify this graph used to calculate the Gini coefficient which is employed to plot the income inequality in a population.
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Lorenz curve
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A 1948 study by Patinkin points out that one of the results of this occurrence may be offset by the Haberler-Pigou effect, resolving a certain paradox surrounding instant price reduction. It may be resolved via the Svensson or Krugman methods, while Global Taylor rules may produce it when combined with the zero bound rate. Public depreciation announcements and inflation targeting are two of its popular solutions. An increase in government spending has a full multiplier effect on the equilibrium income level in this case in which the IS curve intersects a horizontal LM curve, though cutting interest rates fails to produce change in unemployment or demand. FTP, what is this scenario characterized by consumer preference for mobile hard currency?
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liquidity trap
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Klein determined that it was related to the H/M [H-over-M] ratio while, in Tobin's review of Friedman's Monetary History, he attributed the fall in this value from 1880 to 1915 to the spread of commercial banking. Irving Fisher famously predicted that this quantity would rise with increasing level of technology and Keynes attacked the concept, claiming that it was not independent of the level of money stock. It can be defined as the ratio of GNP to the supply of money, but it is more often given as P times Q divided by M in the quantity theory of money. FTP, name this term, defined as the rate at which money changes hands, which in physics refers to a speed with direction.
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velocity of money
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Part seven of this eight-part work is anchored by a discussion of 1597's Boulston case, where the court tried to argue for corn-thieving rabbits as nuisance. Other sections focus on the "reciprocal nature" of the title concept and a dismissal of Pigou's ideas in The Economics of Welfare. Expanding on an earlier essay's arguments about the importance of transaction costs to the growth of the firm, this 1960 work argued that the initial allocation of legal rights doesn't matter when the economic result is efficient, an idea now known as its author's eponymous economic theorem. FTP, identify this classic article by Ronald Coase.
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"The Problem of Social Cost"
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Grossman and Hart have suggested that failure of some corporate takeovers may be due to this behavior that, according to Ronald Coase, can be reduced by lowering transaction costs to near zero. In a 1968 essay, Garrett Hardin discounted the possibility of natural altruism and argued that, in the context of positive externalities, laissez faire policies inevitably lead to it. The tit-for-tat approach may be appropriate for one analog, the iterated prisoner's dilemma, but the concept of a public good leads to a tragedy of the commons in a more general situation. FTP, name this economic problem in which actors avoid paying for goods that cannot be taken away.
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free rider problem (or free riding; prompt on tragedy of the commons before it's mentioned)
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For a small tax, it is equal to negative one half times the tax times the change in quantity demanded, so if demand is perfectly elastic or supply perfectly inelastic it will be equal to zero. In a monopoly situation, part of the consumer surplus is transferred to the monopolistic firm, while this part remains. Tariffs and import quotas will also create this quantity, as both consumer surplus and producer surplus are reduced, and Jared Waldfogel has famously proposed that Christmas represents one. FTP, name this distortion from fair market equilibrium which causes a non-Pareto-optimal system to have the namesake potential economic gains that are never actually transferred to anyone.
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deadweight loss
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Richard Lipsey developed it in a broader context, clarifying the adjustment function. Robert Solow and Paul Samuelson found that it also held in the United States and made it relevant to policymakers by introducing mark-up pricing. Edmund Phelps and Milton Friedman questioned its stability in the long run, arguing that the government could not maintain a permanent tradeoff between the two quantities in question, disagreeing with the findings made in the article "Analytics of Anti-Inflation Policy" with their view of the natural-rate hypothesis. FTP, name this relationship depicting the inverse relation between the rate of unemployment and the rate of change of money wages in a certain curve.
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Phillips curve
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They may cease to exist in a Markowitz model, although rational actors can introduce them in more complicated scenarios. When they are injected into the Slutsky Equation, the result is a uniquely negative semidefinite symmetry. Alfred Marshall devoted approximately ten lines of his Principles of Economics to them originally, and Uriel Spingel argued that public transportation was one. They clearly differ from the Veblen type, which factor in conspicuous consumption, and two Harvard economists have made the case for rice and noodles being ones in parts of China. FTP, name these theoretical inferior goods most famously exemplified by potatoes during the Irish potato famine.
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Giffen good (prompt inferior goods)
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This man discusses the rise of the special interest group and political privilege in the essay "The Clash of Group Interests," and includes a chapter on the "evolution of fiduciary media" in his first book which comes with an introduction by Lionel Robbins. That book, The Theory of Money and Credit, was first published in 1912 but later appended collectively with other works like Planned Chaos. He defined the titular idea as "purposeful behavior" in discussing the self-evident axioms of praxeology in his magnum opus Human Action. Also well-known for The Anti-Capitalist Mentality and his study Socialism, FTP, name this mentor of Friedrich von Hayek, an Austrian School laissez-faire economist.
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Ludwig Elder von Mises
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One of the first recognized implementations of this policy came with an organization founded by Al Whittaker and David Bussau, and according to an article in The Economist, its first beneficiary was Carlos Moreno in 1974. Projects like Zopa's and Prosper seek to extend this basic idea to private action in developed nations. A summit dedicated to its furtherance was convened in 1997, and a second last November in Halifax. A development that won Muhammad Yunus and Grameen Bank a Nobel Peace Prize in 2006, FTP, give the term used to describe this idea of extending very small loans to particularly the poor and unemployed.
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microcredit (or microloans or microfinance)
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This theory has been extended by the construction of Biger and Hull. The risk-neutral measure of it can be given by the Carmeron-Martin-Girsanov theorem, and its most well-known variants are the Cox-Ross-Rubinstein method and the Garman-Kohlhagen measure, which extends it to foreign values. The market's expectation creates the volatility smile problem in this method, which assumes geometrical Brownian motion and an absence of arbitrage and delta-hedging. Introduced in the Journal of Political Economy in 1973, it results in a partial differential equation and won Robert C. Merton a Nobel for work in 1997. FTP, name this economic formula, the most popular way of pricing options, named for two economists.
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Black-Scholes theory/formula/model/method
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Tom Baker authored an article "on the genealogy of" this economic concept. Roland Maude-Griffin and John Nyman have written a paper on the welfare effects of it in a belated response to a work by Mark Pauly on the economics of this. First coined by Kenneth Arrow, this term arises in international law in the case of odious debt where loans give incentives to foster corrupt regimes, but the classic case of this phenomenon deals with health insurance, the possession of which may inefficiently affect how patients make use of medical services. FTP give the economic term for the irresponsible behavior people tend to exhibit when all risk is transferred away from them.
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moral hazard
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His first publication, based on Morning Chronicle articles a year before, caused the repeal of the Bank Restriction Act. This man's writing were collected after his death by Maurice Herbert Dobb and his longtime follower Piero Sraffa. He discusses labor-saving techniques in a chapter "On Machinery," and after marrying a Quaker, he wrote The High Price of Bullion and formulated a theory that would be discovered concurrently by Robert Torrens. A proponent of the idea that real income tends to remain near subsistence, FTP name this economist who, in his Principles of Political Economy and Taxation, discussed the Iron Law of Wages and formulated the principle of competitive advantage.
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David Ricardo
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Robert Hall's imposition of it on the permanent income theory implies that consumption is a random walk, and this idea is a building block for the theory of "tax smoothing." John Maynard Keynes provided an early version of this theory by discussing the "waves of optimism and pessimism" that determine economic activities, and an example of this theory in practice is the fact that stock prices depend in part on what prospective buyers and sellers believe the price will be in the future. First proposed by John Muth, for 10 points, name this economic assumption which requires accounting for market actors' knowledge of policy when attempting to influence the economy.
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rational expectations theory
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One member of a group known by this name wrote Bengal Nights and The Forge and the Crucible, while the founder of that group explained his methods in The Comparative Study of Religions. In addition to the circle of Mircea Eliade and Joachim Wach, this name also denotes a group of anti-New Criticism literary scholars led by R.S. Crane. Ernest Burgess and Robert Park led a sociological group by this name, which also denotes the faculty of George Stigler and James Buchanan, who opposed the idea of market failure. For 10 points, give this common name which applies to a group of monetarist economists, such as Milton Friedman, who worked at a certain university.
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Chicago School
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Arrow's Impossibility Theorem may be strengthened by replacing the conditions of montonicity and citizen sovereignty with this. A similar theory by Kaldor and Hicks adds hypothetical compensation to this situation. One may graphically represent a set of situations that share this characteristic as an eponymous "frontier." It does not imply equity and, in an exchange-based economy, this state may be reached when competitive equilibrium is present. For 10 points, identify this important economic concept named after an Italian thinker who wrote Mind and Society; a concept which denotes an allocation to which no improvements can be made without marginal cost.
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Pareto efficiency [or Pareto optimality; prompt on efficiency; prompt on optimality]
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Elizabeth Peters extended this man's most notable result in a study of divorce rates across states, which found that the ease of getting divorced has no effect on the prevalence of divorce. His eponymous conjecture states that monopolists attempting to use price discrimination must eventually offer a low price to their consumers, but he is more famous for being the architect of the sale of the electromagnetic spectrum for use by communications companies. He wrote The Nature of the Firm and The Problem of Social Cost. For 10 points, name this economist who stated that a lack of transaction costs will always minimize externalities in his namesake theorem.
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Ronald Coase
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With Albert Hunold, this man co-founded the Mount Pelerin Society, which was dedicated to the preservation of free societies. His Abuse of Reason project criticized social scientists' misuse of natural science principles, a practice he called "scientism." He wrote a critical review of Keyenes's A Treatise on Money, and Keynes returned the favor for this man's Prices and Production. His trade cycle theory was popular during the Great Depression, but he is most famous for a work in which he argues that socialist ideals lead to tyrrany, and that Nazi Germany and the USSR were on the titular journey. FTP, name this Austrian who shared the 1974 Nobel Prize in Economics with Gunnar Myrdal, the author of The Road to Serfdom.
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Friedrich August von Hayek
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Works espousing this group's beliefs include "Theory of Taxation" and "Rural Philosophy," along with their namesake work by du Pont, subtitled "The Natural Constitution of the Government Most Advantageous to Humankind." They divided workers into productive, sterile, and proprietor classes, and they attacked mercantilism in their belief that taxes should only be levied on land. They believed that among economic activities, only agriculture yielded a net profit, and they were supporters of the laissez-faire doctrine in part due to their mystical "natural order" theory. Including the likes of La Trosne, Abbe Baudeau, and Marquis de Mirabeau, FTP name this group of French economists led by the author of Tableau Economique, Francois Quesnay.
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Physiocrats
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This man's biographers include Joseph Dorfman and J.P. Diggin, who called him "The Bard of Savagery." Early in his career this man wrote an article on "The Barbarian Status of Women," and he was the original translator of Ferdinand Lasalle's Science and the Workingmen. Longer works include The Instict of Workmanship and The Place of Science in Modern Civilization, and along with Charles Beard and John Dewey he founded the New School for Social Research. Best known for a work containing a section on the fur trade, this is, FTP, what economist, who coined the term 'conspicuous consumption" in his The Theory of the Leisure Class?
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Thorstein Veblen
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The relationship this graph predicted was actually discovered by Irving Fisher in the 1920s, over thirty years before its namesake published his work on it. It can be derived theoretically using Okun's law from the short-run aggregate supply, although its originator examined one of the properties in terms of nominal wages rather than the standard common today. Originally based on data for the United Kingdom from 1861 to 1957, it was generalized by Samuelson and Solow to the United States, but it could not explain the economic oddities of the 1970s because in the long run, it is perfectly inelastic. FTP, name this curve which in the short-run depicts an inverse relationship between unemployment and inflation.
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Phillips curve
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This man's biographers include Joseph Dorfman and J.P. Diggin, who called him "The Bard of Savagery." Early in his career this man wrote an article on "The Barbarian Status of Women," and he was the original translator of Ferdinand Lasalle's Science and the Workingmen. Longer works include The Instict of Workmanship and The Place of Science in Modern Civilization, and along with Charles Beard and John Dewey he founded the New School for Social Research. Best known for a work containing a section on the fur trade, this is, FTP, what economist, who coined the term 'conspicuous consumption" in his The Theory of the Leisure Class?
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Thorstein Veblen
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The Markovian type has been used to model inventory control, where dynamic pricing is optimal over fixed pricing. Another type may satisfy the weak axiom of revealed preference and is said to be homogeneous of degree zero. That type, Walrasian, is linked via the Slutsky decomposition to another type based on the substitution effect, Hicksian. Its cross elasticity is positive for substitutes and negative for complements, while its income elasticity is positive for normal goods and negative for inferior ones. Its curve shifts to the right with an increase in income or preference, and it generally has negative slope when plotted against price. FTP, name this willingness and ability of buyers to purchase a good.
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demand
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The first English author to discuss it specifically may have been John Hales, in his A Discourse on the Commonweal of this Realm of England, though in the 19th century H. D. Macleod named it for a contemporary of Hales. Later in the 19th century Robert Giffen argued that its namesake didn't understand the importance of bimetallism, while William Stanley Jevons claimed, on its basis, that Herbert Spencer's arguments about private coinage were flawed. Its namesake enunciated this principle in the 16th century in response to the "Great Debasements" introduced by the predecessors to Queen Elizabeth. FTP, name this principle which states that bad money drives good money out of circulation.
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Gresham's Law
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This work's opening chapter ponders "the great enigma of our times," which the author identifies as the association of the titular phenomena. This work's sixth chapter is dedicated in part to the refutation of Malthusian theory, which the author claims "exonerates the rich," and cites the famines in India in opposition to it. Beginning with some definitions of capital, this work remarks that "all capital is wealth, but not all wealth is capital," while chapter 14, using the example of "the island of free opportunity," investigates the persistence of the second titular concept "amidst advancing wealth." Another chapter links the causes of industrial depressions to the denial of equal access to land, while chapter 18 approvingly cites the Physiocrats. Best known for its claim of the primacy of land to economic activity, FTP, name this 1879 book, the most famous work of Henry George.
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Progress and Poverty
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The first appearance of it can be traced back to work on agricultural experiments on the Mecklenburg estate of J. H. von Thunen, though von Thunen's The Isolated State offers a different form of it. One version of it can be applied to modeling utilities with several components, a technique used in supply-side analysis. When its model coefficients sum to one, then it is first-order homogenous, which implies constant returns to scale. Those two coefficients, alpha and beta, are constants determined by technology, and they are exponents of the parameters L and K. Due to its multiplicative form, a consequence of it is that if K is set to zero, then its output is also zero, which implies that there can be no productivity when capital input is zero. Mapping outputs from capital and labor inputs, FTP, identify this production function popularized by the two men for whom it is named.
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Cobb-Douglas production function
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Chapter 13 of this book concludes that the "most singular feature" of the title entity is the contrast between the "care and encouragement which it lavishes on the production of private goods" and the restraint on those emerging from the public sector. That chapter, "The Bill Collector Cometh," follows chapters devoted to "the dependence effect" and "the Marxian pall." The introduction asks if people will long be content with the "rather mundane goal" of continually increasing the title quality, and notes that this book is the "window to a room" which the author inhabited for the next decade as he wrote The New Industrial State. FTP, name this 1958 book which discusses a culture which had freed itself from poverty, a work by John Kenneth Galbraith.
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The Affluent Society
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He realized that he had to solve a problem of maximizing a linear function on a convex polytope in order to increase equipment productivity for a plywood trust. That led him to create a general theory he called the "method of resolving multipliers," which he discussed in The Mathematical Method of Production Planning and Organization. In a later work, 1959's The Best Use of Economic Resources, he showed that any economy has to use prices to efficiently allocate resources. His research was paralleled by similar work carried out by the Dutch-born author of Three Essays on the State of Economic Science, with whom he shared a major award. FTP, name this pioneer of linear programming, a Soviet economist who in 1975 shared the Nobel Prize with Tjalling Koopmans.
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Leonid Kantorovich
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Using Beveridge-Nelson or Hodrick-Prescott decomposition, it can be applied to business cycles. Due to its static nature and lack of causality, it is often replaced by the more dynamic model of Martin Zagler. Other variations on it include a Vector Autoregression approach by Blanchard, and one which included expectational variables by Milton Friedman, who has also related it to the Philips Curve. It implies that an increase in labor productivity will cause "jobless growth," and according to its formulator its factor "a" is approximately .3. FTP, identify this economic law that describes the relationship between unemployment and the GNP gap, named for an American economist whose first name is Arthur.
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Okun's Law
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He argued that classical economics focused on artificial equilibriums in "Why is Economics not an Evolutionary Science?" and claimed that Bismarck's autocracy gave Prussia a technical advantage in "Imperial Germany and the Industrial Revolution." He postulated a tech-savvy class in conflict with the business elite in The Engineers and the Price System and criticized colleges run by businessmen in The Higher Learning in America. This author of The Theory of Business Enterprise cited the potlatch custom in another work as an example of frivolous spending to achieve social status. FTP, name this economist who postulated "conspicuous consumption" in The Theory of the Leisure Class.
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Thorstein Bunde Veblen or Tosten Bunde Veblen
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Hicks claimed that "great castles of theory" have been built upon this concept. For it to apply, marginal rate of substitution must equal marginal rate of transformation, a situation graphically shown as the community indifference curve. Sen noted that it was possible for an economy to be this and "perfectly disgusting," while Allais defined it as the "absence of distributable surplus," and situations satisfying this are sometimes known as noninferior or nondominated. When it applies, no new allocation of resources can make one individual better off without harming another, but, when it fails, deadweight loss occurs. FTP, name this eponymous efficiency of an Italian economist.
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Pareto optimality/efficiency/optimal/efficient [prompt on "optimality," "efficiency," "optimal," "efficient," "noninferior," or "nondominated"]
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Harvard's Robert Jensen and Nolan Miller attempted to prove their existence in China, and Battalio, Kagal, and Kogut's experiments with quinine water and lab rats proved that they can exist on the individual level. These entities can arise when the price of a good or service outstrips the consumer's tendency to purchase similar goods or services; that is, when the income effect is greater than the substitution effect. They were first postulated to exist in Alfred Marshall's Principles of Economics, which used the example of bread with meat as a substitute. FTP, name this kind of inferior good that people buy more of when the price goes up.
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Giffen goods
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In 1990 Kahneman, Knetch, and Thaler undermined the behavioral basis for this idea by demonstrating the "endowment effect." In the original paper on it, the author analyzed a section of Halsbury's Laws of England to show how it improved on earlier schemes. In previous solutions, parties would need to internalize their externalities through tax or subsidy, an idea associated with Pigou. Named by George Stigler, it reimagines negotiating parties as a single agent able to bargain optimally. First described in the 1960 paper "The Problem of Social Cost," FTP, identify this theorem which states that, absent transaction costs, any government allocation of property rights is efficient, named after the 1991 winner of the Nobel Prize in Economics.
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Coase Theorem
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Compared with alternatives, this object has a tendency to overstate increases because consumers normally opt not to buy products with significant price increases; if such purchases are made without reductions in satisfaction, then this economic device also overstates reductions in standard of living. In computing it, a product's price is given a certain weight depending on its importance compared to other purchases during a base period. If the value of this index is one, then a set of goods bought in the previous period would cost the same in the current period. FTP, identify this price index defined by a German economist and contrasted with the Paasche index.
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the Laspeyres price index
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It has been extended by Cox and Ross' constant elasticity of variance method, while one of its original assumptions was relaxed in work by Jonathan Ingerson. Because it assumes a flat surface of volatility, a related problem is the "smile" shape of real data. Building on the work of Louis Bachelier, it uses a model of geometric Brownian motion to characterize change, and it assumes that it is possible to borrow or lend money at a constant risk-free interest rate. Positing that an asset's value is a function of the expected benefit from acquisition and the present value of paying the exercise price, this is, FTP, what model of option pricing named for two economists?
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Black-Scholes option pricing model
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He developed the idea of Hebbian learning independently of Hebb and published his model of the brain in the 1952 work The Sensory Order. Around the same time he opposed excessive reductionism in social science in The Counter-Revolution of Science. He came to eschew explanations of business cycles based on changes in interest rates, and his 1939 book Profits, Interests, and Investments contrasts with earlier work in the Austrian vein like The Pure Theory of Capital. He distanced himself from some of his disciples in Why I am Not a Conservative, which was published as an appendix to The Constitution of Liberty. FTP, name this economist, who argued that collectivism leads to tyranny in The Road to Serfdom.
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Friedrich Hayek
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In recent work with Alvarez and Weber, he argues that increasing short term interest rates to reduce inflation can be rationalized using quantity theoretical models of monetary equilibrium, while in another paper, he modeled inflations effect on prices using a "menu cost" incurred when sellers change prices. He also showed that in the absence of unanticipated shocks, the neutrality of money holds in his namesake island model. That model shows that long-run inflation fails to maintain the Phillips curve, agreeing with the Policy Ineffectiveness Proposition. He argued for microfoundations for macroeconomic models in his namesake critique, and extended a modeling technique introduced by Muth, for which he won the 1995 Nobel. For 10 points, name this man who split his prize money with his ex-wife after winning for his work on rational expectations.
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Robert Lucas
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He changed his mind about the effect of income on happiness, and also on which of decision or experienced utility ought to be maximized. With Lovallo he examined the foibles of entrepreneurship and with Redelmeier he examined dominance violations in the context of colonoscopies. With Snell he showed that people like plain yogurt more than they predict, while with Cass Sunstein he has examined what motivates jury damage awards. Famous for his explanation of the fourfold pattern of risk attitudes, his most famous collaboration began with a paper on the belief in the law of small numbers. Co-discoverer of the availability and representativeness heuristics, this is, FTP, what psychologist who, with Amos Tversky, developed Prospect Theory, the winner of the Nobel Prize in Economics in 2002?
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Daniel Kahneman
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Australian economist P. J. Lloyd has argued that the basis of this idea can be found in the work The Isolated State, while John Stuart Mill explained his theory of comparative advantage using a system of equations that imply it . When applied to utility, it implies that all own price elasticities are negative one and all cross price elasticities are zero. Employing this model over small farms shows that nonessential factors may yield a positive product. One problem with this model is that applying statistical data to it sometimes suggests that the demand for labor is greater than 1. First proposed by Knut Wicksell, it implies constant returns to scale, and its namesakes also estimated that the share of labor and capital stays constant over time. For 10 points, identify this model which includes parameters for output elasticity as a function of technology, a doubly eponymous production function.
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Cobb-Douglas Production Function
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The introductory epigraph from the poet Lydia Sigourney describes the plight of the wandering tribes of Israel "whom the desert devoured in their sin." In a chapter on "Inferences from Analogy", the author disputes the idea that humans are like counterparts in the vegetable and animal kingdom in matters of reproduction, trying to contend that humans are not bound in a Malthusian trap. In a section on "Improvements in the Arts", the author describes the effects of technological improvement on the demand for labor, while earlier the author contends that wages and interest are necessarily positively related, in a section on "The Law of Interest." Arguing that the "remedy" for increasing inequality can only be found through regulating capital, this ideas for this work were first laid out in the author's earlier essay "Our Land and Land Policy." FTP, identify this work that argued for a common tax on land, written by Henry George.
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Progress and Poverty
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This must decrease as rival firms' aggregate output increases in order for Cournot competition to hold, and if a strictly positive subsistence level is introduced to a CES function, this quantity becomes non-monotonic. It is given by price times the quantity 1 minus 1 over demand elasticity, showing that its sign is an indicator of elasticity. In oligopolies, this curve has a jump due to the kinked demand curve, and in monopolies, a deadweight loss is caused because this curve, and not demand, determines quantity sold. For 10 points, name this curve that generally marks equilibrium where it meets marginal cost, and which measures the added revenue of an additional unit sold.
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marginal revenue [prompt on MR]
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He defended Say's law by arguing against the possibility of general gluts, and he called for a stable monetary policy in Proposals for an Economic and Secure Currency. A concept developed by Robert Barro which states that equilibrium consumption is invariant if the government is financed by tax increases or deficit spending is known as his "equivalence," and he also introduced diminishing marginal returns. In another work, he criticized Malthus' theory of rent, and that work also introduced the theory of comparative advantage. For 10 points, identify this economist who wrote Principles of Political Economy and Taxation and advanced the "iron law of wages."
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David Ricardo
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A variation to this concept that includes perturbations in decision models is known as trembling-hand perfect. This concept holds when certain sets are non-empty, convex, compact subsets of a Euclidean space by the Kakutani Fixed Point Theorem, and the utility function is continuous and quasi-concave. A Bayesian one is found by anticipating the plans of others, and they were worked on by Harsanyi and Selten as well as their namesake, who introduced them in the paper Non-Cooperative Games. For 10 points, name this idea in which each player's strategy choice is a best-response to the strategies played by his rivals, a game theory equilibrium named for a schizophrenic.
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Nash equilibrium [accept Nash after "equilibrium" is read, prompt on it before]
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Generally, output shocks cause this quantity to move in the same direction as deflated stock prices, but move in opposite ways from normal stock prices. Serletis treats variations in it as being a random walk, and Keynes notably believed this quantity was unstable, changing with the interest rate. It may be determined nationally as the ratio between the GDP and the money supply, while Irving Fisher believed it is stable and independent of the other variables in his quantity theory of money, where it can be given by his equation of exchange as "PT over M." For 10 points, give this term denoting how often a unit of money is spent over a time interval.
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velocity of money
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This economist posited an early form of the Quantity Theory of Money in Tract on Monetary Reform. He proposed that recessions can get worse in the presence of near-zero nominal interest due to liquidity traps, and that an increase in GDP can result from initial investment through the multiplier effect. He argued against reparations in a work critical of the Treaty of Versailles, The Economic Consequences of the Peace, and in another work for increased government spending to combat recessions. For 10 points, name this writer of The General Theory of Employment, Interest and Money.
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John Maynard Keynes
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He claims it is impossible for an omnipotent, loving God to be in control of the world, but possible for a weaker God to exist in his Three Essays on Religion. One of his works lays out five principles of inductive reasoning, while another argues that freedom is good for women if it is good for men. In addition to System of Logic, he wrote a work that uses dolors and hedons to calculate the "Greatest Happiness Principle" and claims that "actions are right in proportion as they tend to promote happiness." The author of The Subjection of Women, for 10 points, name this man, who outlined a philosophy practiced by Jeremy Bentham in his book Utilitarianism.
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John Stuart Mill
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This work discusses the growing importance of burghers in a section that explores the rise of towns after the fall of the Roman Empire. This work discusses the advantages of founding new colonies and uses a comparison of French and Portuguese wine to argue against protectionist tariffs in its fourth book, "Of Systems of Political Economy," which argues against the mercantilist system. Its first section supports the division of labor and discusses a pin factory, while it later argues that individuals acting due to self interest will benefit the market via the "invisible hand." For 10 points, name this major work of Adam Smith.
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An Inquiry into the Nature and Causes of the Wealth of Nations
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This man wrote about "How Keynes Came to America" in one work, and "The Massive Dissent of Karl Marx" in another. In addition to Economics, Peace and Laughter and The Age of Uncertainity, he wrote about the economic development of the Ford Motor Company in "The Imperatives of Technology," which appears in a work that argues that classical demand has been subverted by advertising and other methods of corporate planning, while his most famous work discussed income disparities and coined the term "conventional wisdom." For 10 points, name this author of The New Industrial State and The Affluent Society.
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John Kenneth Galbraith
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This man notably published a speech that he gave in Parliament on the resumption of cash payments, in which he attacked the position of the titular Mr. West. This man left the important paper "The Invariable Standard of Value" unfinished. This man is associated with an "93 per cent" theory which makes possible his Labor Theory of Value. This man stated that it doesn't matter whether government finances spending with debt or tax increase, known as his and Barro's equivalency. His "Essay on the High Price of Corn" showcased his opposition to the Corn Laws. For ten points, identify this economist who wrote Principles of Political Economy and Taxation, who is also well known for an Iron Law of Wages and describing comparative advantage.
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David Ricardo
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Heinrich von Thune based his theory of land value on this concept in his treatise The Isolated State, in which he illustrated it utilizing a series of concentric circles termed his "rings." This concept also underlies Hotelling's rule, which gives a function for obtaining maximum rent while utilizing all of one's capital. This concept is the reason that a firm's short-run marginal cost curves will slope upward as the number of units of output increases, and in addition to explaining why the PPF is convex, it was key to Ricardo's understanding of rent. For ten points, identify this concept which states that the yields of production gradually decrease as production increases.
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Law of Diminishing Marginal Returns (or "Law of Variable Proportions")
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One of his last works was written with Faye Duchin, and discussed what effect machines would have in displacing unskilled labor. In addition to writing The Future Impact of Automation on Workers, he also wrote an article on "The Pure Theory of the Guaranteed Annual Wage Contract." This man utilized his best known idea in a plot of the "Structure of World Production," and he formulated that idea in The Structure of American Industry. His best known technique uses a table to chart the flow of money between various industries, while he noted that the U.S. exports labor-intensive goods instead of capital-intensive goods. For 10 points, identify this economist who developed input-output analysis, in addition to elucidating a namesake paradox.
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Wassily Leontief
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This man adopted many of the tenets of Wicksell's theories on credit for his Treatise on Money, while this man later noted that Britain could never hope for a dole in his unfinished work "Proposals for an International Currency Union." He wrote about both "ex ante" and "alternative" theories of interest, and outlined some of his early theories in "How to Organise a Wave of Posperity." The "cross" named for this economist shows a system in which aggregate price and aggregate demand are equal. This economist wrote important tracts on military spending like How to Pay for the War, and then wrote about great changes in the European system in his work The Economic Consequences of the Peace. An advocate for combating recessions by utilizing deficit spending, for 10 points, name this English economist and author of The General Theory of Employment, Interest and Money.
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John Maynard Keyne
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His doctoral dissertation concerned the substitution between Labor and Capital in U.S. Manufacturing. One of his articles introduced a model in which all individuals can only observe aggregated price changes, a set up which means that they cannot make the right decisions about changing production levels. A related concept to that Islands model is this man's namesake critique which claims that any economic relationships that appear to hold in the real world may become invalid as a response to active fiscal or monetary policy. For 10 points, identify this Chicago economist whose paradox concerns why more capital is not flowing from developed to developing nations, a 1995 Nobelist better known for expounding the neutrality of money and rational expectations.
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Robert Lucas, Jr.
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Incidences of this phenomenon create the divisions in a construct named for Freeman, Perez, and another thinker, while it was first described following an analysis of Kondratiev's long-wave cycles. An example of this concept in action was the rise in popularity of personal computers and subsequent fall of mainframe computer giant Digital Equipment Corporation. It occurs when a new entry into a market centering on a new or innovative technology creates growth in that market at the expense of established companies in that market. First coined in Capitalism, Socialism and Democracy, it has been referred to as its originator's namesake "Gale." FTP, name this process central to the theories of endogenous growth and evolutionary economics, created by Joseph Schumpeter.
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Creative Destruction
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One criticism of this theory by Buchanan stated that if it were true, the public would be completely indifferent to an unfunded pension system. One formulation of it stated that families are infinite dynasties with intergenerational altruism in order to support it, but that work was criticized by Martin Feldstein due to its ignorance of population growth. Its modern form was proposed in the article "Are Government Bonds Net Wealth", but it was first proposed in the article "Essay on the Funding System", but then later retracted. Sometimes also named for Robert Barro, FTP, name this theory that states the change in demand is the same whether a government finances itself with debt or taxes, named for the author of The High Price of Bullion and proponent of comparative advantage.
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Barro-Ricardian equivalence or Barro-Ricardo equivalence proposition
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This man stated that contractions in money income are almost always caused by a decrease in velocity in his The Veil of Money, and one of his ideas was criticized by Public choice theorists because it relied on the intervention of a benevolent despot. Michael Kalecki criticized one concept named for this man, which states that during times of deflation, employment and economic output increase due to a rise in the real balance of wealth. His most famous idea was published in Wealth and Welfare, and was criticized in "The Problem of Social Cost" by Coase. FTP, name this welfare economist, whose namesake taxes are used to stop market failure by correcting for negative externalities.
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Arthur Pigou
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Thirteen years after the development of this concept, its originators put forth its cumulative version that corrected a violation of first order stochastic dominance. Chapter 16 of Peter Bernstein's Against the Gods discusses the formation and development of this theory, which is often represented by a graph that rapidly increases in the fourth quadrant but flattens out in the first quadrant. One example of this concept, which can be avoided by hedonic framing, is the disposition effect, which occurs when investors tend to sell assets that have appreciated but hold those that have depreciated. This theory contradicts the belief that people process the net effect of gains and losses, and argues instead that gains and losses are valued differently. For 10 points, name this theory from behavioral economics about the assessment of risk, developed by Amos Tversky and Daniel Kahneman.
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prospect theory
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This thinker applied a mathematical model for electrical control systems to the analysis of production in his paper "On the Application of Servomechanism Theory in the Study of Production Control."He's not Wassily Leontief, but along with David Hawkins, he names a condition for guaranteeing that an input-output matrix has a unique, positive solution. His essays on human behavior are collected in Models of Man, and along with Allen Newell, he developed the Logic Theorist and the General Problem Solver. He analyzed decision making in his work Administrative Behavior, and argued that agents work towards a limited aspiration level rather than attempting to maximize their happiness. For 10 points, name this economist and polymath who coined the terms "bounded rationality" and "satisficing."
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Herbert Simon
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A 1961 article on "The Economics of" this concept links its absence to price dispersion, and the same author created the concept of "search unemployment" in an article about this "in the labor market." An introduction to its namesake branch of economics can be found in a collection of Wicksell lectures titled Wither Socialism?It is assumed to be fully accounted for in security prices in the Efficient Markets Hypothesis. An essay that describes "Hiring as Investment under Uncertainty" uses college education as an example of its acquisition through applicant signaling. Its lack can lead to bounded rationality and to adverse selection. For 10 points, imbalances in what commodity are discussed in Akerlof's "The Market for Lemons," which describes a situation in which it is asymmetric?
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information
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Along with Emile Grunberg, this economist asserted that predictions lead people to act in a way that causes predicted outcomes to resemble actual outcomes in "The Predictability of Social Events," one of the earliest works of rational expectations. This economist developed the MPS model of the American economy for the Federal Reserve. He devised a measure that adjusts the risk of a stock to match a performance benchmark along with his granddaughter Leah, a measure known as M-squared. Along with Richard Brumberg, this economist theorized that people decide how much they want to spend at each age, and predicted that people save during their youth to spend money during retirement. The developer of the life cycle hypothesis, for 10 points, identify this economist, the namesake of a theorem about conditions in which a firm's financial decisions do not affect its value along with Merton Miller.
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Franco Modigliani
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McCallum and Nelson added a term regarding expected future income in order to fully optimize this model and apply it to business cycles. Don Patinkin modified this model by substituting the aggregate supply function, and Robert Mundell introduced foreign trade to it. The Lucas critique argues that it cannot be used to predict the effects of a change in government economic policy. Construction of it may begin with a "cross" popularized by Alvin Hansen, for whom this model is sometimes named. The liquidity trap occurs if one of the curves in this model is nearly horizontal. For 10 points, name this macroeconomic model that plots equilibrium curves for both goods and money, elucidated in the 1937 paper "Mr. Keynes and the Classics" by John Hicks.
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IS-LM model
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This economist asked “What need of a House of Commons or of a House of Lords?†in Observations on Parliamentary Reform. His namesake equivalence was popularized by Robert J. Barro. One of his works, subtitled “A Proof of the Depreciation of Bank Notes,†argues for the adoption of a metallic currency and is titled The High Price of Bullion. His most famous work sets out a theory of rent which was criticized by Malthus, as well as introducing the idea of comparative value. For 10 points, name this economist who wrote Principles of Political Economy and Taxation and espoused the Iron Law of Wages.
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David Ricardo
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This economist wrote a work on “the conduct of universities by business men†entitled The Higher Learning in America. He lends his name to a type of luxury good which violates the law of demand. This author of The Theory of Business Enterprise also wrote a work with a section on “The Belief in Luck.†That work cites festive celebrations as an example of spending for the purpose of displaying one's wealth. For 10 points, name this economist who coined the term “conspicuous consumption†in The Theory of the Leisure Class.
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Thorstein Veblen
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This economist argued that countries should avoid deflation even if it causes their currency to depreciate in A Tract on Monetary Reform. He dismantled classical theory in favor of logical-relationist theory in A Treatise on Probability. He argued against the gold standard in The Economic Consequences of Mr. Churchill, and referred to the Treaty of Versailles as a Carthaginian peace in another work, entitled The Economic Consequences of the Peace. For 10 points, name this British economist who wrote General Theory of Employment, Interest, and Money and advocated governmental intervention in the economy.
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John Maynard Keynes
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It's not by Karl Marx, but this work contrasts “value in use†with “value in exchange†in the section “Of the Origin and Use of Money.†It mentions that "Brutus lent money in Cyprus at eight-and-forty per cent" in a section discussing stock. Its first chapter popularized the phrase "the division of labor" and relied on the example of a pin factory, while a metaphor commonly associated with this work was reused from the author's earlier The Theory of Moral Sentiments. For 10 points, name this 1776 work that used the concept of the “invisible hand†to advocate a laissez-faire economic approach, a book by Adam Smith.
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An Inquiry into the Nature and Causes of the Wealth of Nations
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According to the Heckscher-Ohlin model, this concept derives from differences in relative factor endowments. Paul Samuelson argued that this concept might not apply today because capital and labor can easily cross national borders. First illustrated by Robert Torrens in an essay on the Corn Laws, this concept was more famously illustrated by David Ricardo with the example of Portuguese wine and English cloth. For 10 points, name this concept that states that even absolutely advantaged countries can benefit from specialization and trade.
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comparative advantage
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In a two product economy, the output of product of one product affects the production function of a second product in a condition of this type which is named for JE Meade. According to the Coase theorem, market failure is due to transaction costs, not to these, which Coase describes as a joint product of a victim and a polluter. Pigovian taxes can be used to counterbalance these phenomena. The tragedy of the commons is caused by the negative type of these. Examples of the negative type include a company's air pollution harming animals. For 10 points, name these phenomena which occur when an economic transaction has an effect on a third party.
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 externalities [or spillover]
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Luigi Pasinetti created a mathematical system formalizing the growth theory of this thinker, a scholar of whom is J. H. Hollander. Piero Sraffa collected the works of this thinker, whom Robert Barro credited with influencing his suggestion that the timing of tax changes does not affect consumer spending. This man argued in one essay that raised tariffs on grain imports raised rents and lowered profits of manufacturers. He is credited with introducing the differential theory of rent and the law of diminishing returns. Later, this man with a namesake equivalence principle proposed his labor-embodied theory of value. For 10 points, name this author of The High Price of Bullion and Principles of Political Economy and Taxation who also came up with the idea of comparative advantage.
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David Ricardo
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This economist connects cosmos and taxis with thesis and nomos in three volumes entitled “Rules and Order,†He wrote “The Mirage of Social Justice†in a work entitled Law, Legislation, and Liberty. Oskar Ryszard Lange was rebuked by this economist in an essay entitled “The Use of Knowledge in Society,†which is contained in a work entitled Individualism and Economic Order. Three parts entitled “The Value of Freedom,†“Freedom and the Law,†and “Freedom in the Welfare State†comprise his The Constitution of Liberty, which he appended with the postscript “Why I am Not a Conservative.†For 10 points, name this Austrian-born economist who used Nazi Germany and the Soviet Union as examples of arguing that collectivism tends to lead to tyranny in The Road to Serfdom.
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Friedrich von Hayek
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The Tobin effect shows how this phenomenon encourages investors to place their money in real capital projects. Its “built-in†form comes from adaptive expectations and is part of Gordon's “triangle model.†Tobin and Mundell showed that real economic effects can occur from expectation of this phenomenon, which can lead to inefficiencies from shoe-leather and menu costs. The existence of this phenomenon prevents a “liquidity trap.†The Fisher hypothesis argues that the real interest rate is independent of this phenomenon, which is measured by changes in the GDP deflator or CPI. For 10 points, name this phenomenon, coming in “cost-push†and “demand-pull†varieties, which causes the consumer price index to rise as money becomes devalued.
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inflation
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The "Cost of" this man is explored in a paper by Robert Cooter which examines how one of this man's papers is misleading. Robert Ellickson's paper entitled this man and "and cattle" examines this man's example of farmers and ranchers and concludes that the way trespass disputes were resolved manifested as social norms. This man's most famous result contradicted Pigou's theory about the role of the government in the economy by positing that agents can internalize externalities through negotiation. That theorem states that in the absence of transaction costs, any distribution of property rights leads to optimal resource allocation, and was first explained in his “The Problem of Social Cost.†For 10 points, name this Chicago school economist who authored “The Nature of the Firm.â€
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Ronald Coase
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In political science, the first chapter of Essence of Decision explores this idea in the context of the Cuban Missile Crisis. Gary Becker notably applied this concept to the analysis of addiction and crime. The sequential form of this idea determines optimal strategies in a perfect Bayesian equilibrium. Herbert Simon's notion of satisficing relies on the “bounded†form of this idea, since humans are rarely mentally able to carry out complex calculations. Utility maximization is assumed in most game theoretic situations due to perfectly exhibition of this idea. Behavior of this type is built into many macroeconomic models and is called these type of “expectations.†For 10 points, name this assumption suggesting that people optimally use all available information when making decisions.
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rationality [accept rational expectations since that is what is specifically referred to early on]
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Both the Atkinson-Stiglitz Separability theorem and the Cortlett-Hague theorem relate this quantity for commodities to goods that are substitutable for leisure. The Lindahl form of this entity is employed in an equilibrium dependent on the personal marginal benefit of a public good. Christina and David Romer's recent study found the multiplier of a reduction in this entity to be roughly three. Ramsey developed an optimal set of rules based on the quantity demanded of each good to minimize total burden. Externalities can be limited by the Pigouvian type of them. Deadweight losses are caused by the imposition of, for 10 points, which financial charges collected by the government to finance the nation's budget?
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taxes [do not accept more specific answers]
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Lionel McKenzie, Gerard Debreu, and this man are the namesakes of a basic model in general equilibrium theory, while the fundamental paradox that exists in the determination of demand for information was described in this economist's work Essays in the Theory of Risk-Bearing. This economist helped define measures of risk aversion with John Pratt, while state contingent claims, which pay out one unit in certain states, are known as him namesake type of securities and are used in analysis of security markets. The Gibbard-Satterthwaite theorem generalized the most famous claim made by this author of Social Choice and Individual Values. For 10 points, name this American economist who stated that Pareto efficiency, independence of irrelevant alternatives, and non-dictatorship are among the criteria that cannot all be satisfied in a “fair†voting system.
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Kenneth Arrow
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Yohai Benkler tacked the word “Linux,†onto the title of one of this man's most famous essays in an essay partially named after this man's “penguin.†This thinker showed that the title objects were privately provided and charged for their service, challenging their use as an example of public goods, in "The Lighthouse in Economics". This man traced to the Department of the Navy the allocation of the spectrum by the FCC in the course of arguing that the FCC should instead auction off spectrum bands. In another paper, this man stated that the title entities are like national economies, except that they are formed based on decisions concerning marketing costs. Another of his essays uses the example of a cattle rancher's cows destroying a farmer's crops in arguing against the ideas of Arthur Pigou to state that, if rights can be transferred with low transaction costs, then property rights need not be precisely defined, because parties can trade them. For 10 points, name this author of "The Nature of the Firm" who introduced his namesake theorem in "The Problem of Social Cost".
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Ronald Harry Coase
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Four sets of equations, including two that describe the function of individual households, comprise the model named for this man and Cassel. This man theorized that in perfect competition, profits would approximate zero, because prices would approximate costs. Each agent calculates his demand for the good at every possible price and submits this to an auctioneer in the auction named for this man. The law named for this man suggests that if all other markets in a system are in equilibrium, the remaining market must also be in equilibrium; that observation underpins his most famous theory, which was improved upon by Arrow and Debreu. For 10 points, name this French author of Elements of Pure Economics, the founder of General Equilibrium Theory.
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Leon Walras
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In the context of a Hecksher-Olin model, fixed factor prices will lead to the long-run version of this being piecewise linear, and equal to the Rybszynski line. Heavy dominance of economies of scale can lead to a convex one of these, and similar inputs can lead to a linear one of these, but it is normally concave due to opportunity costs, and output bundles are allocatively efficient when they are on this line. Its most stereotypical presentation involves two goods which are chosen as metaphors for national security and domestic goods. Guns and butter are often used to illustrate, for 10 points, this basic economics curve which shows the limits of efficient production for various combinations of two goods.
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 production possibility frontier [accept production possibility curve]
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Like John Hicks, this economist described bundles of goods that could be analyzed together, which he termed "composite commodities". One idea advanced by this man was criticized in by Edward Leamer who drew upon an idea modified by Vanek, but that result was supported by a 1972 study by Robert Baldwin. Earlier, B. C. Swerling criticized that result on the grounds that this man had chosen to analyze data from an year with abnormal trading conditions. This man also developed a linear model of an economy that uses a consumption matrix to denote the dollar value of goods consumed and produced by various industries of an economy. For 10 points, identify this economist whose "paradox" is inconsistent with the Hechsher-Olin model, best known for his development of the input-output analysis.
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Wassily Leontief
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This economist developed a general equilibrium model of agricultural economies in an early paper, "Incentives and Risk Sharing in Sharecropping". He helped develop a model that explains how involuntary unemployment persists, because it costs employers to monitor their workers' levels of effort. That model of efficiency wages is named for him and Carl Shapiro. This founder of the Initiative for Policy Dialogue also wrote a 2002 work that criticized the IMF for policies that harm developing countries. Along with Akerlof and Spence, this economist discussed screening as a way to ameliorate a condition in which one party to a transaction knows more than the other. For 10 points, name this sharer of the 2001 Nobel for his studies of information asymmetry, an economist at Columbia who wrote Globalization and its Discontents.
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Joseph Stiglitz
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This work notes the importance of the ability for a citizen to foresee "how the authority will use its coercive powers in given circumstances". In another section, the author describes the "bad" jobs that must be accomplished efficiently but deter the humanitarians and attract the wicked. In yet another section, the author of this work rejects the idea of a directed economy by reasoning that pecuniary affairs are not "low" matters that restrict our freedom, but a key to greater freedom in all aspects of life. Those chapters are "Planning and the Rule of Law", "Why the Worst Get on Top" , and another section of this work is "The End of Truth". Using the examples of Nazis and Soviets, this work argues that socialism and central planning inevitably lead to oppression. For 10 points, name this libertarian work by Friedrich von Hayek.
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 The Road to Serfdom
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This thinker introduced his namesake triangles linking consumer spending and production time in his Prices and Production. He distinguished between thesis and nomos in the three-volume Law, Legislation, and Liberty. This organizer of the Mont Pelerin Society distinguished his outlook from the title one in "Why I Am Not a Conservative." One work by this author includes a chapter on "The Socialist Roots of Naziism" and warns against conditions leading to collectivization and the title oppression. For 10 points, name this Austrian economist who described the consequences of central planning in The Road to Serfdom.
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Friedrich August von Hayek
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This economist's theories were revived in Production of Commodities by Means of Commodities by Piero Sraffa. This man invoked Say's Law in suggesting that a general glut was impossible. He published an essay stating that raising the tariff on grain imports would lead to decreased manufacturing profits and increased rent. He linked the price of commodities to the amount of time expended in their production in his labor theory of values. This man stated that working wages would remain near subsistence level, his Iron Law of Wages. For 10 points, name this author of Principles of Political Economy and Taxation who explained the theory of comparative advantage.
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David Ricardo
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This economist's work on information asymmetry includes "Uncertainty and the Welfare Economics of Medical Care". He names a model in general equilibrium theory assuming a lot of labor resources and access to every kind of available good with Gerard Debreu. Alan Gibbard and Mark Satterthwaite modified this man's most notable idea, which was presented in Social Choice and Individual Values. That idea states that criteria such as the Pareto efficiency and unrestricted domain cannot exist in a voting system that seeks to fairly represent voters' preferences. For 10 points, name this economist with a namesake Impossibility Theorem.
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Kenneth Joseph Arrow
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The amount of this quantity increases when banks can lend, according to the multiplier effect. One theory of this is based on an equation which contains the product of the average price level and the volume of transactions, the Fisher Equation; that theory is known as the "quantity theory" of this. The rate at which this is exchanged is called its velocity. The three aggregates of this quantity include bank deposits, savings accounts, and repurchase agreements, and are known as M1, M2, and M3. By Gresham's law, bad amounts of it drive out good amounts at a fixed rate of exchange. For 10 points, name this staple of the economy consisting of coins and banknotes.
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money
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In one work, this thinker stated that modern technology was incompatible with the irrational process of business and finance, contrasting industrial and pecuniary employment. One of his works has a chapter on "The Belief in Luck" and examines the title group's interest in sports like bullfighting and football. This author of The Theory of Business Enterprise has namesake goods which fall in demand when they fall in price due to a perception of lower quality. That ties in with this author's idea that the rich need a way to justify and display their wealth. For 10 points, name this economist who introduced the idea of conspicuous consumption in his Theory of the Leisure Class.
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Thorstein Bunde Veblen
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Nominal interest rates are said to lag behind this in the Mundell-Tobin effect. The built-in form of this effect is the base of the "triangle model" of it. This phenomenon can be due to a decrease in aggregate supply or an increase in aggregate demand. Milton Friedman argued that this concept was not linked inversely with unemployment, and in the 1970s, a high rate of this was linked with stagnation, discrediting the Phillips curve. The hyper- form of this phenomenon plagued Weimar Germany, and this effect can be "cost-push" or "demand-pull". Measured by the Consumer Price Index, for 10 points, name this phenomenon in which a unit of currency is worth less over time.
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inflation
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The article outlining this theory cited survey data by Elinor Ostrom as supporting the idea that resources must be devoted to supporting community needs. A 2008 paper by Keizer et al in Science reported six field experiments in support of it, though articles by Harcourt and Ludwig cited data from Housing and Urban Development relocation projects as evidence against it. It has also been criticized for neglecting to consider alternative causes such as abortion by Steven Leavitt. This theory was initially described in an Atlantic Monthly article by Wilson and Kelling, and developed out of an experiment concerning abandoned vehicles in the Bronx and Palo Alto conducted by Zimbardo. Many attribute reduced crime in New York in the 1990s to the implementation of this theory by Rudy Giuliani. For 10 points, name this theory that decreasing disorder will reduce crime.
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broken windows theory
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In one work, this thinker wrote that "the proper office of benevolence is to soften the partial evils arising from self-love, but it can never be substituted in its place." He called for less reliance on foreign politics in The Grounds of an Opinion, while another work defines a certain concept as "the reward of present valour and wisdom as well as of past strength." Elsewhere, he argued that "moral restraint" is the only feasible "preventative check," but will not succeed without universal suffrage and education. This author of Inquiry into the Nature and Progress of Rent used that work to present some "Remarks on the Speculations of Mr. Godwin, Condorcet, and Other Writers," arguing that means of subsistence increase by an arithmetic ratio doomed to lag behind the geometric ratio of population increase. For 10 points, name this British classical economist who wrote Essay on the Principal of Population.
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Thomas Malthus
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"commercial sydrome" and "guardian syndrome" - one promotes honest collaboration and one does not, but in combination the systems form a "monstrous hybrid." Another work elucidates the three "transactions of decline" including military production, subsidies to poor regions, and advanced-backward trade. This thinker used the example of Japan developing bicycle repair shops in the late 1800s, which led the country to eventually produce its own bicycles, to demonstrate the idea of "import replacement." In addition to Systems of Survival, this author defended pursuing the sovereignty of Quebec in The Question of Separatism. This longtime opponent of Robert Moses described the "ballet of the sidewalks" in New York in arguing for mixed-use neighborhoods. For 10 points, name this urban studies pioneer and author of The Death and Life of Great American Cities.
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In one work, this thinker argues that two sets of virtues drive market action
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Jane Jacobs
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Gianfranco Poggi wrote a book about it and the modern mind, while Carl Menger tried to explain it with his "regression theorem." The way it interacts with one's web of social relations is the subject of a book on the "Social Meaning of It" by Viviana Zelizer. By contrast, a volume on the "State Theory of It" written by Friedrich Knapp emphasized its constructed nature, an idea which Max Weber would criticize in Economy and Society. John Kenneth Galbraith wrote a book subtitled "Whence It Came, Where It Went" referring to it in the context of the oil crisis of the 1970s. It functions by occupying a middle distance according to "The Philosophy of [It]", written by Georg Simmel, while Gresham's law states that its bad form drives out its good form. For 10 points, identify this medium which can be exchanged for goods and services.
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money accept equivalents (cash, currency, etc.)
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Odean's work demonstrating the failure of momentum strategies has lended support for it, while Lesmond et al find that relative strength strategies similarly fail. A key methodology in studying it is the "event study" which as a whole find no systemic over or underreaction biases. Grossman and Stiglitz argued that this idea was paradoxical on the grounds that it would imply that firms had no incentive to improve. Alternatives to this idea have been proposed by Andrew Lo centering around the idea of adaptation. First expressed by Louis Bachelier in his dissertation, "The Theory of Speculation", its weak version states that prices should reflect all available information, while the strong form asserts that prices also reflect hidden information. For 10 points, identify this economic doctrine espoused by Eugene Fama which colloquially asserts that one cannot consistently beat the market.
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efficient markets hypothesis
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one marked by the absence of hypotheses, the Teutonic school, and the Bancroft school - are the three schools of historical research. Its diminishing impact was noted by Ellen Nore, the biographer of its author, and started primarily after Forrest Macdonald's devastating takedown of its research. A late chapter looks at the "Political Doctrines" of the men this book targets, and the penultimate chapter examines the "Popular Vote" on the titular item. The final chapter includes a long analysis of John Marshall's Life of Washington and this book also contains a detailed catalog of the public securities and land holdings of a group of 18th-century Americans. For 10 points, name this book which argued that the Founding Fathers were only interested in preserving their wealth in drafting the titular document, a 1913 monograph by Charles Beard.
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This book opens by claiming that three groups
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An Economic Interpretation of the Constitution of the United States
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One of this man's books opens with a discussion of Price Waterhouse vs. Hopkins and outlines the ways that identity features in norms and utility. That work, Identity Economics, was co-written with Rachel Kranton. He also argued that a "marriage shock" contributed to increased rates of crime and drug use in the United States in his, "Men Without Children." In his 2007 presidential address to the AEA, published as "The Missing Motivation in Macroeconomics," he suggested that assuming decision-makers have "natural norms" would eliminate five "neutralities," a theme he also expounded on in a book co-written with Robert Shiller. In his most famous work, he argued that concerns over quality uncertainty would result in prices that result in "the bad driving out the good" and cause market failure. For 10 points, identify this economist, who illustrated asymmetric information through used cars in his 1970 paper "The Market for Lemons."
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George Akerlof accept Identity Economics before "that work"
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A relaxed set of postulates for this framework is the Mas-Colell axioms, which eliminate the need for transitivity. In systems governed by this model, the set of excess demand functions is not restricted by the usual rationality restrictions on individual demands in the economy, a result known as the Sonnenschein-Mantel-Debreu theorem. One argument for this theory considers an auction in which each agent calculates his demand for a good at every possible price and submits it to an auctioneer, from which a price in agreement with this theory will be computed. The production function usually used in this theory is due to Koopmans, although it was significantly refined by another economist in The Theory of Value. This theory's central tenet is that excess market demand always sums to zero. For 10 points, identify this theory of economics that claims that all markets and prices are always at a macroeconomic optimum.
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general equilibrium theory [or GET; or DGSE, dynamic generalized stochastic equilibrium, accept neo-Walrasian theory; prompt on neo-classical theory; do not accept or prompt on "partial equilibrium theory" or "equilibrium theory"]
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One unorthodox proposed method for dealing with it involves massive foreign currency purchases. Eggertson and Woodford argue that for open-market operations to be effective in this situation requires changing future expectations of policy. Consequently, one approach for dealing with it has been written about by Lars Svenson and involves an explicit central bank commitment to a future price level, also known as nominal GDP targeting. Another method for dealing with this problem is when the Treasury agrees to broaden its asset purchases, termed "quantitative easing." Paul Krugman has written about Japan's experience in this state, and has argued that the recent economic crisis is an instance of it. Occurring when consumers' preference for cash is greater than the supply of money, FTP, identify this macroeconomist state in which low or zero interest rates fail to stimulate consumer spending.
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liquidity trap
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This economist developed a theory suggesting that bond investors have a preference for a maturity length that can only be overturned if there is a risk premium, called "preferred habitat theory." Along with Duesenberry he names a consumption function that postulates that current consumption is determined not just by current income, but also by its previous highest peak. He designed a large scale model of the US economy for the Federal Reserve, the MPS. He also partially names a theorem that demonstrated that under certain assumptions, the value of a firm is not affected by whether it is financed by equity or debt. With Robert Brumberg, he postulated that young and old households have a higher propensity to consume while middle aged households have a higher propensity to save, the "Life Cycle Hypothesis of Saving." For 10 points, name this 1985 Nobel winner, who formulated a capital structure theorem with Merton Miller.
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Franco Modigliani
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In one paper, this thinker argued that technological advancement in “machine processes†occurs because of the “instinct of workmanship.†He wrote a work in which the title group is likened to barbarians because its members do not produce, but merely make money by shuffling around what others make. He names a set of luxury goods for which the demand increases as price increases. He coined the phrase “conspicuous consumption†to describe the title social group of one of his works. For 10 points, name this sociologist who wrote The Theory of the Leisure Class.
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Thorstein Bunde Veblen [or Torsten Bunde Veblen]
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A function that gives this quantity at a fixed level of utility is a “compensated†function. Changes in the curve that represents this quantity can be the result of the substitution and income effects. The Slutsky equation relates the Hicksian and Marshallian functions of this quantity. Giffen goods do not conform to the namesake law of this quantity. This quantity has a downward-sloping curve, and is defined as the willingness and ability to purchase a commodity or service. For 10 points, name this economic quantity, often paired with supply.
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demand
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The rate of these entities should be higher when consumer elasticity is lower according to Ramsey's rule, which attempts to minimize the Harberger triangle for these entities. In the U.S., one of these measures based on currency exchange is named for James Tobin. Negative externalities can be corrected by one of these measures named for Pigou. Henry George proposed that a single one of them on land would reduce deadweight loss. Types of them include “value added†and “ad valorum.†For 10 points, name these charges levied by a government on its citizens.
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taxes
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Book III of this work discusses how the law of primogeniture slowed the agricultural progress of Dark Ages Europe, a time period in which city and rural folk were similarly privileged. The author of this work was a student of Francis Hutcheson who was inspired by Bernard de Mandeville's The Fable of the Bees. It uses the example of a pin factory to illustrate its concept of the division of labor. This work equates self-interest with the collective interest in its image of the “invisible hand.†For 10 points, name this work that supports laissez-faire economics, by Adam Smith.
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The Wealth of Nations [or An Enquiry into the Nature and Causes of the Wealth of Nations]
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This quantity goes down two percent from its potential for every one percent increase in unemployment rate, by Okun's law. Its namesake deflator is equal to its nominal value over its real value times one hundred. Its nominal value over the money supply equals the velocity of money. This quantity is symbolized “Y†in the equation “MV equals PY.†It is equal to the sum of net exports, government spending, investment, and consumption. For 10 points, name this statistic, which shows the total value of all goods and services produced in a country in a given time period.
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GDP [or gross domestic product; do not accept “Gross National Product†or “GNPâ€]
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