Econ-Chapter 5

Question 1

Socialism

Answer 1

an individual’s cost or value, we spread it to society, at large.

Question 2

The market reflects individuals’s values of goods and services by

Answer 2

people paying private costs to receive things privately value.

Question 3

socialism asserts

Answer 3

that the individual should act to promote the good of society, not to promote the individual’s wellbeing

Question 4

Karl Marx

Answer 4

who is often pointed to as the founder of socialism, said, production should come “from each, according to his ability, to each, according to his need”

Question 5

Authoritarian choice

Answer 5

wether the state’s decisions are made by a dictator, the peoples’ elected representatives, or by popular vote.

Question 6

Original rationales of socialism

Answer 6

• firms have more power than individuals, so they exploit workers.
• fairness, different social classes

Question 7

Marx’s prediction

Answer 7

Machines would replace people, which would equal unemployment .

Question 8

Modern Rationale’s for socialism

Answer 8

we must socialize individual decisions by state force in order to counter nature’s socializing effects

Question 9

external costs

Answer 9

some cost or value that naturally spill over to others

Question 10

externalities

Answer 10

external costs and benefits

Question 11

efficient assessment of external costs and benefits must be done by

Answer 11

those who have knowledge of all facets of the economy and nothing to to gain from the regulatory process

Question 12

Authoritarian decision makers choose for others based on…

Answer 12

their own assessments of values and costs

Question 13

The state can respond in two ways to maintain order:

Answer 13

• allow individual choice= not maintaining socialist order

- use force and the threat of force to maintain the socialist order

Question 14

Concept of socialism

Answer 14

the individual should act to promote the good of society, not the individuals wellbeing

Question 15

all socialist orders

Answer 15

serve the individuals who run the state

Question 16

Fascism

Answer 16

a system under which the state does not take title to property, but orders the use of that property and the individual in any way it wishes

Question 17

US socialism is generally

Answer 17

fascistic in nature

Question 18

Eminent Domain

Answer 18

where property is taken for state public use, such as roads, and parks, but the owner is compensated.

Question 19

Civil forfeiture

Answer 19

where a person is suspected of a crime and that person’s property is seized because it is automatically suspected as having contributed to the crime.

Question 20

“state use”

Answer 20

taking eminent domain such as houses, because the state would rather sell the property to business interests.

Question 21

latest socialist rationale-popular in US

Answer 21

the state provides any good that the individual might derive external benefits from, ex: roads, schools, courts

Question 22

the percent of spending done by the state is a degree of

Answer 22

socialism in a nation

Question 23

when government spending increases it becomes more

Answer 23

socialist

Question 24

Bastiat said:

Answer 24

when gov. asks for money, they are really asking for physical co-operation with them, due to the labor they experience, which the end result changes nothing

Question 25

private property is an important part of

Answer 25

capitalism

Question 26

the pursuit of happiness

Answer 26

meant the right to hold and use property freely, to choose one's profession, to make contracts, and to travel.

Question 27

capitalist view of society

Answer 27

society's best interest is promoted by individuals with property rights making voluntary decisions

Question 28

individuals who wish to serve their own interest must

Answer 28

engage in value creating production and trade

Question 29

Adam smith said

Answer 29

by people trying to improve their own gain, they are improving society's too

Question 30

incentive problem

Answer 30

socialism divorces consumption from production and, in that way, takes the incentive to voluntary serve.

Question 31

socialist favor

Answer 31

regulations that will conserve resources

Question 32

capitalists favor

Answer 32

regulations based on individuals values of the resources and the products they produce, as reflected in market prices.

Question 33

Don Boudreaux

Answer 33

he discusses that we can not calculate how to compensate for these endowments, i.e.. jobs in medical field v.s. poet

Question 34

Socialists concentrate on

Answer 34

pointing out only the differences in income, without respect to how those differences came to be and propose that the state use force (taxation, backed by armed agents) to correct the differences in income generated in large part by the differences in individuals' natural endowments including ambition.

Question 35

Thomas Piketty and Emmanuel Saez (P&S)

Answer 35

used tax dollars to conclude that incomes in the united states have become more and more unequal since the 1980's

Question 36

Burkhauser, Larrimore, and Simon (BLS)

Answer 36

different viewpoint of P&S's results, | times have changed, before tax-income, ...

Question 37

Thomas Sowell adds to the BLS statement

Answer 37

1. the richest are the elderly the poorest are the teens and twenties 2. people can sometimes gain or loose income

Question 38

efficient economy allows for

Answer 38

value that can help poverty

Question 39

free economy

Answer 39

individuals contribute income in order to help others and there is competition between nonprofit firms to provide the most and best aid.

Question 40

as government expands its attempts to help,..

Answer 40

voluntary giving declines

Question 41

Milton Friedman says:

Answer 41

society runs on greed advancements are made by individuals pursuing self interests not my government capitalism and free trade allows for no poverty