2/23/25, 2:46 PM BCOR 1015 Midterm 2025 update|comprehensive questions and verified answers (complete solutions) Exam|GRADE A+!! Fla…
BCOR 1015 Midterm 2025
update|comprehensive questions and verified
answers (complete solutions) Exam|GRADE A+!!
Save
Terms in this set (144)
Hayek said, "Due to the ..."decentralized market exchange facilitated via the
underlying challenge of price system allocates scarce resources more
knowing the value of any effectively than any other system of organization"
given resource to any
given individual at any
place and time...."
- needed for rational economic order
- markets provide systematic process that allows us
to pool our individual knowledge
What does Hayek believe
- price signals allow for coordination even when
regarding knowledge?
you do not know the other person
- decision making must be decentralized
- spontaneous organization is bottom up
What does Hayek mean Local people and those that live in a certain area
when he says decisions (ex. Uber drivers, local brokers, aka those in the
should be left with the area)
man on the spot?
Do experts have enough - there is a lot to know
info to decides what is - experts lack local knowledge
needed and what is not - it is dynamic and changing
when constructing a - there are individual preferences and values
rational economic order?
https://quizlet.com/1009471830/bcor-1015-midterm-2025-updatecomprehensive-questions-and-verified-answers-complete-solutions-examgrade-… 1/18
,2/23/25, 2:46 PM BCOR 1015 Midterm 2025 update|comprehensive questions and verified answers (complete solutions) Exam|GRADE A+!! Fla…
What did Hayek argue Must be decentralized to consider all of the
regarding decisions dispersed knowledge since no one or no
making? community has complete total knowledge
Dispersed and bits of incomplete contradictory
What is the problem of knowledge...thus a not just a problem of how to
knowledge for Hayek? allocate resources but how to utilize knowledge not
given to everyone in totality
Someone who takes advantage of tiny differences
information across markets by simultaneously
Arbitrager purchasing a product in one market and selling it in
another market. (Uses local knowledge to make
profit)
"...it is perhaps worth stressing that economic
problems arise always and only in consequence of
What doubts does Hayek
change"
have about central
- believes that if they don't consider change
planning?
important, then those are the same people who
stress technological knowledge and development
- markets provide a systematic process that allows
What does Hayek say us to pool our individual knowledge
about markets, - business people make decisions using price
knowledge, and the price signals
system? - spontaneous organization is bottom level to top
(think of in terms of company)
Allow for sophisticated coordination even when
What does Hayek think
individuals never met and know nothing about each
about price signals?
other
- uses prices to solve knowledge problem; involves
Market economies decentralized decision making
(Hayek) - claim to reduce (some) scarcity by incentivizing
production / innovation
https://quizlet.com/1009471830/bcor-1015-midterm-2025-updatecomprehensive-questions-and-verified-answers-complete-solutions-examgrade-… 2/18
, 2/23/25, 2:46 PM BCOR 1015 Midterm 2025 update|comprehensive questions and verified answers (complete solutions) Exam|GRADE A+!! Fla…
- solution will involve SOME CENTRAL PLANNING,
at least in short term
Centrally planned - argue that markets create (not reduce) scarcity
economies (Hayek) - freedom in the marketplace and prices foster
individual prerogative and information destructive
to society and the conservation of resources
- SCARCITY can be alleviated through
innovation/coordination; not an inevitable human
condition
What are Hayek's thought
- VALUE (vs. market prices) comers form application
son central planned
of labor to resource in transformation to
economies: socialism and
products/services (labor theory of value)
scarcity?
- HIGH PROFIT MARGINS are not an indication that
something is scarce and needs additional
production
- maximizes profit also implies minimizing labor cost
What did Hayek also say
- seen as labor exploitation...paying less than labors
regarding high profit
value
margins in centrally
- and leads to observable "scarcity" amongst
planned economies?
laborers
- overproduces goods desired by powerful rather
than poor b/c prices tell them to
- encourages people to define those by
(Hayek) What are socialist
possessions rather than by social images like being
reactions to capitalism?
an humanitarian
- capitalist create and stimulate demand for good
by producing more luxuries than necessities
- information or knowledge is needed to construct a
rational economic order
What is a good summary
- argued that decision making must be
of Hayek?
decentralized b/c dispersed knowledge
- favors a market approach with price signals
What are the three - what will be produced
fundamental questions - who will produce it (aka by whom)
regarding scarcity? - who is the product for (aka for whom)
https://quizlet.com/1009471830/bcor-1015-midterm-2025-updatecomprehensive-questions-and-verified-answers-complete-solutions-examgrade-… 3/18
BCOR 1015 Midterm 2025
update|comprehensive questions and verified
answers (complete solutions) Exam|GRADE A+!!
Save
Terms in this set (144)
Hayek said, "Due to the ..."decentralized market exchange facilitated via the
underlying challenge of price system allocates scarce resources more
knowing the value of any effectively than any other system of organization"
given resource to any
given individual at any
place and time...."
- needed for rational economic order
- markets provide systematic process that allows us
to pool our individual knowledge
What does Hayek believe
- price signals allow for coordination even when
regarding knowledge?
you do not know the other person
- decision making must be decentralized
- spontaneous organization is bottom up
What does Hayek mean Local people and those that live in a certain area
when he says decisions (ex. Uber drivers, local brokers, aka those in the
should be left with the area)
man on the spot?
Do experts have enough - there is a lot to know
info to decides what is - experts lack local knowledge
needed and what is not - it is dynamic and changing
when constructing a - there are individual preferences and values
rational economic order?
https://quizlet.com/1009471830/bcor-1015-midterm-2025-updatecomprehensive-questions-and-verified-answers-complete-solutions-examgrade-… 1/18
,2/23/25, 2:46 PM BCOR 1015 Midterm 2025 update|comprehensive questions and verified answers (complete solutions) Exam|GRADE A+!! Fla…
What did Hayek argue Must be decentralized to consider all of the
regarding decisions dispersed knowledge since no one or no
making? community has complete total knowledge
Dispersed and bits of incomplete contradictory
What is the problem of knowledge...thus a not just a problem of how to
knowledge for Hayek? allocate resources but how to utilize knowledge not
given to everyone in totality
Someone who takes advantage of tiny differences
information across markets by simultaneously
Arbitrager purchasing a product in one market and selling it in
another market. (Uses local knowledge to make
profit)
"...it is perhaps worth stressing that economic
problems arise always and only in consequence of
What doubts does Hayek
change"
have about central
- believes that if they don't consider change
planning?
important, then those are the same people who
stress technological knowledge and development
- markets provide a systematic process that allows
What does Hayek say us to pool our individual knowledge
about markets, - business people make decisions using price
knowledge, and the price signals
system? - spontaneous organization is bottom level to top
(think of in terms of company)
Allow for sophisticated coordination even when
What does Hayek think
individuals never met and know nothing about each
about price signals?
other
- uses prices to solve knowledge problem; involves
Market economies decentralized decision making
(Hayek) - claim to reduce (some) scarcity by incentivizing
production / innovation
https://quizlet.com/1009471830/bcor-1015-midterm-2025-updatecomprehensive-questions-and-verified-answers-complete-solutions-examgrade-… 2/18
, 2/23/25, 2:46 PM BCOR 1015 Midterm 2025 update|comprehensive questions and verified answers (complete solutions) Exam|GRADE A+!! Fla…
- solution will involve SOME CENTRAL PLANNING,
at least in short term
Centrally planned - argue that markets create (not reduce) scarcity
economies (Hayek) - freedom in the marketplace and prices foster
individual prerogative and information destructive
to society and the conservation of resources
- SCARCITY can be alleviated through
innovation/coordination; not an inevitable human
condition
What are Hayek's thought
- VALUE (vs. market prices) comers form application
son central planned
of labor to resource in transformation to
economies: socialism and
products/services (labor theory of value)
scarcity?
- HIGH PROFIT MARGINS are not an indication that
something is scarce and needs additional
production
- maximizes profit also implies minimizing labor cost
What did Hayek also say
- seen as labor exploitation...paying less than labors
regarding high profit
value
margins in centrally
- and leads to observable "scarcity" amongst
planned economies?
laborers
- overproduces goods desired by powerful rather
than poor b/c prices tell them to
- encourages people to define those by
(Hayek) What are socialist
possessions rather than by social images like being
reactions to capitalism?
an humanitarian
- capitalist create and stimulate demand for good
by producing more luxuries than necessities
- information or knowledge is needed to construct a
rational economic order
What is a good summary
- argued that decision making must be
of Hayek?
decentralized b/c dispersed knowledge
- favors a market approach with price signals
What are the three - what will be produced
fundamental questions - who will produce it (aka by whom)
regarding scarcity? - who is the product for (aka for whom)
https://quizlet.com/1009471830/bcor-1015-midterm-2025-updatecomprehensive-questions-and-verified-answers-complete-solutions-examgrade-… 3/18
