BCOR 1015 MIDTERM 1 EXAM GRADED A+

The main economic questions (rational economic problem) - ANSWER-1. What product am I making 2. who is going to make it 3. who gets the product scarcity is either... - ANSWER-real or articficial hayek - ANSWER-believed that knowledge is incomplete, prices are the signals, decision making must be decentralized Hayeks view on markets - ANSWER-markets are a systematic process that allows us to pool knowledge hayek thinks economic problems arise due to ... - ANSWER-change Hayek thinks scarcity can be avoided by - ANSWER-technological advances and societal coordination economic competition between enterprises... - ANSWER-fuels the drive towards capital accumulation Hayeks view on goevrnment - ANSWER-favors decentralized planning Hayeks favored system - ANSWER-bidding system or market market economy - ANSWER-use price - Economic decisions are made by individuals or the open market. Central Planned Economy - ANSWER-decided by state - The central government makes ALL the decisions on production cox view on production - ANSWER-switch from production of profit to production of use would Hayek agree with cox - ANSWER-NO UBI - ANSWER-universal basic income conservatives would support this because it would streamline gov't programs rent control - ANSWER-the idea of price controls interferes with the market and price signals fairness - ANSWER-you get what you give agreeing what is thought to be right no discrimination equality - ANSWER-everyone gets the same state of being equal equity - ANSWER-- giving people more than others in order to achieve equal - justice in the way people are treated - freedom from bias why not socialism wrap up - ANSWER-- equalize and redistribute - threats to socialism are human nature (selfish) and limit of social technology - option luck - ANSWER-inequality that represents different preferences market luck - ANSWER-like a Casino friedman wrap up - ANSWER-- property rights are a matter of law and social convention - what is the justification of state intervention - what is the effect of measures taken - preferences and choices are okay with economic success - principle of market economy is the cooperation of voluntary exchange - capitalism allows for improvement of capacities taxing on the wealthy according to friedman - ANSWER-taxing the wealth does not lower their wealth it lowers consumption freedman's favored tax system - ANSWER-flat rate on income Friedman view on capitalism - ANSWER-leads to less long run inequality why does Cohen use a camping example - ANSWER-good example of socialist principles in a certain situation equality of outcome - ANSWER-we all reach the same finish line together equality of access - ANSWER-same opportunities equality of opportunity - ANSWER-no status restrictions community principles - ANSWER-focus on community egalitarian principles - ANSWER-- meaning that there are little to no distinctions in access or acquisition of status - equality of opportunity problems with socialism - ANSWER-1. social customs may limit (race, gender, Indian caste system) 2. unchosen social disadvantages (born into poor fam, society may aid through medicaid) 3. differences in prefernces (choice to be a surgeon or surf coach) Communal Reciprocity - ANSWER-Cooperation for its own sake Motivation is for the greater good Market Reciprocity - ANSWER--Cooperation because it serves you to do so -Motivation is greed and fear friedman thinks... - ANSWER-unequal is fair payment in accordance to product - ANSWER-paid on the amount of product you make friedman view on redistribution through taxation - ANSWER-no no no friedman view on inequality ... - ANSWER-motivates people to work hard and take risk Einstein reading wrap up - ANSWER-- purpose of socialism to overcome the predatory phase of human development - capitalism is the source of evil - man is dependant on society - worker is in constant fear of losing his job - planned economy does not mean socialism (may enslave the individual and must prevent all powerful gov't) - must reeducate people - laws of ethics and science are different Hamburg and Schmidt - ANSWER-- CEO pay is determined by a board - favor shareholder cooperation - CEO are paid too much kaplan - ANSWER-- awarded pay : salary, bonus - realized pay : value of stock options at the exercised value - CEO help generate great amounts of corperate earnings - market forces = determinant of CEO pay okun views - ANSWER-- tradeoffs - equality and efficiency - do not put rights in the domain of market - rights should be universal, free, nontransferable - the pursuit of efficiency will create inequality - domain of rights=the universal entitlement to rights