Econ questions

1) What is the government’s role in making markets work? Briefly explain two components of government involvement that are required to make markets work, and why they are required for this. (3)

2) Why and how does the fact that poverty is not only absolute but also relative matter for international income comparison? (What does relative poverty mean? Why does this matter when we want to gain an impression of people’s living standards?) (3)

3) Why are Division of Labor and specialization in production important components of increasing productivity in production processes? (What is the division of labor? How does it impact individual worker’s productivity? How is it related to specialization in production?) (3)

4) In broad terms, what distinguished the new technologies used that shape the industrial revolution from the old technology used before the industrial revolution? Name and briefly describe three of the differences we can observe. (3)

5) What promise does the capitalist economic system hold in Adam Smith’s view? (2)

6) Marx sees Smith’s promise of a lifting of the masses out of misery as largely unfulfilled. What does Marx see as a key factor for the lack of participation in wealth by the large majority of people at his time? (3)

7) What different results of competition between companies can we stress comparing Smith and Marx? Also, briefly describe an example for a ‘race to the bottom’ in this context. (4)

8) Following Galbraith, we have listed four characteristics of capitalist systems that make them vulnerable in Marx’s view. What are these? Explain two of these, and why they make the capitalist system vulnerable under Marx’s perspective. (4)

9) What does mainstream economic theory of his time represent for Veblen? More generally, why is it inadequate for analyzing economic issues, in his view? (4)