BCOR 1015 Final Questions and Answers Graded A

BCOR 1015 Final Questions and Answers Graded A What are Hayeks views on planning and decision making? ✔✔he believes in decentralized knowledge HAYEK: what is decentralized knowledge? ✔✔spreading knowledge amongst peo ...

BCOR 1015 Final Questions and Answers Graded A What are Hayeks views on planning and decision making? ✔✔he believes in decentralized knowledge HAYEK: what is decentralized knowledge? ✔✔spreading knowledge amongst people is Hayek against centralization? ✔✔yes HAYEK: how does the price system coordinate resources? ✔✔price signals are used to make decisions and send information to other groups because prices are lower or higher what are price signals? ✔✔signals wrapped up in incentives; prices can constantly adapt and update in response to new information HAYEK: what is arbitrage? ✔✔benefitting from peoples ignorance; buying something cheap at a flea market then re-selling at a higher price Does Hayek argue that arbitrage is moral or immoral? ✔✔arbitrage is moral if its helping allocate resources What article did Cohen write? ✔✔Why not socialism COHEN: what is the bourgeois equality of opportunity ✔✔removal of socially constructed status restrictions COHEN: what is the leftest liberal equality of opportunity ✔✔removal of the disadvantages of circumstances, even if not socially constructed (but leaves differences in opportunity related to "naive or inborn traits") COHEN:what is the socialist equality of opportunity ✔✔corrects for all unchosen disadvantages, that is, for which the agent cannot be held responsible, whether they be disadvantages What were the three inequalities Cohen thought existed? ✔✔1. Laws (formal) 2. Unchosen Social Disadvantages (informal) 3. Raw Talent Because of these 3 things, he wanted to diminish the equality of opportunity COHEN: what is the relationship between equality and community? ✔✔According to cohen reducing inequality involves both equalizing and also a redistribution policy Is Cohen a socialist? ✔✔yes FRIEDMAN: is income equality or inequality fair? ✔✔he thinks inequality should be allowed due to practical and moral reasons COHEN: what did he believe in, in regards to redistribution? ✔✔Believed in redistribution through a flat tax rate - equality People w/ higher incomes get taxed more than poor people and that is UNFAIR COHEN: if people are willing or prefer to work harder jobs, they should or should not be paid more? ✔✔SHOULD How does Friedman conceptualize capitalism? ✔✔believes strongly in free-market capitalism How does Friedman think about redistribution, freedom, ethics, and market efficiency? ✔✔Economic freedom means not only the right of individuals to act freely in the market, but for markets themselves to be free of government regulation What is the tragedy of the commons? ✔✔overpopulation= overuse of resources What does Smith argue in regards to the pursuit of self interests? ✔✔Virtue Theory: although we all have self-interest, we still have empathy and capitalists will achieve civic duty/benevolence. People acting in Self-interest → increased market Productivity what does Hardin argue in regards to the pursuit of self interests? ✔✔the pursuit of self-interest in an open-access commons leads to ruin. Without controls on access and use of the underlying resource, the tragedy of the commons is inevitable What is the tradeoff between efficiency and equality? ✔✔Makes sure people don't infringe on others rights- social welfare approach for positive human rights Maximum efficiency leads to low equality. Maximum equality leads to low efficiency what is an externality? ✔✔a direct, unintended and uncompensated effect on a third party by an individual what is a positive externality? ✔✔an externality that creates social benefits reaped by others what is a negative externality ✔✔impose an additional cost on society that is not explicitly recognized by the buyers & sellers in the market (ex. Smoking) what is the Coase Theorem? ✔✔Doesn't matter who has property rights, you can reach optimal outcome if you allow bargaining w/ externalities Always reaches optimal outcome(coasean bargaining) What are private property rights? ✔✔well defined, monitored, enforced, transferrable commons goods are... ✔✔rival and not excludable public goods are... ✔✔not rival and not excludable private goods are... ✔✔rival and excludable Club goods are... ✔✔non-rival and excludable Was Smith a capitalist? ✔✔yes What are the benefits of division of labor and why was it so important? ✔✔In favor of this because you can specialize in your best product/skill the specialization of the labor force- the breaking down of large jobs into many tiny components. Under this regime each worker becomes an expert in one area of production, increasing their efficiency. What is an example of division of labor ✔✔assembly line What is the example of the pin-factory all about? ✔✔Pin maker; man is not familiar w/ process, has to make every piece of the pin himself, takes him all day to make one pin, def could not make even 20 pins. Not specialized what is the invisible hand ✔✔The idea that people pursuing their own self-interest actually benefit the public at large what is Adam smith saying about foreign trade ✔✔It is in our own self-interest as individuals to buy whatever we want from those who sell it cheapest What doe Marx and Engles say has characterized the history of society? ✔✔the history of class struggles MARX + ENGLES: what do they mean by bourgeois and Proletariat? ✔✔bourgeoisie is meant the class of modern capitalists, owners of the means of social production and employers of wage labour. proletariat, the class of modern wage labourers who, having no means of production of their own, are reduced to selling their labour power in order to live How do Marx and Engels characterize the evolution of the bourgeoisie over time? ✔✔The bourgeoisie developed, increased its capital, and pushed into the background every class handed down from the Middle Ages what is the theory of the communists? ✔✔abolition of private property, free trade what is the distinguishing feature of communism? ✔✔the abolition of the bourgeois property I,PENCIL:What points is the author making with the example of creating a useful and common item that costs almost nothing to consumers? ✔✔The absence of a mastermind, of anyone directing these countless actions to make the pencil. No trace of such a person can be found. Instead, we find the invisible hand at work. Without trade a pencil would cost a lot more What is socialism? ✔✔the factors of production are owned by the public and operate for the welfare of all (left) What is capitalism? ✔✔factors of production are privately owned and money is invested in business to make a profit (right) What is a tame problem? ✔✔a definite solution and an absolute fix What is a wicked problem? ✔✔determined by our bias, no absolute solution VANCE: What is just price? ✔✔any price agreed upon between a willing buyer and seller where does just price originate? what author? ✔✔Thomas Aquinas Thomas aquinas and Vance are... ✔✔opposite. Aquinas is socialist and Vance is capitalist what are examples of government intervention in pricing ✔✔price ceiling, floor and minimum wage. What is usury? (payday lending) ✔✔the illegal action or practice of lending money at unreasonably high rates of interest. what is creative destruction ✔✔the destruction of one industry when another comes into power what is the paradox of progress ✔✔Technological advances have not led to perceptible improvement in collective health and happiness what is disruptive innovation ✔✔revolutionizing but destroying companies, industries and jobs What is the innovator's dilemma? ✔✔do you stay with old (safe) or do you build off your original idea and earn new profits and make some people worse off What are patents? ✔✔has to be original, intangible property. Technological inventions→ novelty (17-20 years) non-obvious and Novel words (STRONGEST IP PROTECTION IN US LEGAL SYSTEM) What are copyrights? ✔✔intangible, creations in the fields of literature and the arts→ originality. Most powerful judicial recourse & remedies in cases of infringement(70 years after death of author) Libraries and researchers are excepted from all copyright restrictions What are trademarks? ✔✔lasts until company is out of business. Features that distinguish one product or service from another - distinctiveness what are trade secrets ✔✔Information not generally known or reasonably ascertainable by others (least protected),don't always want to patent What is intellectual property? ✔✔a work or invention that is the result of creativity, to which one has rights and for which one may apply for a patent, copyright, trademark, etc.