1. Give a brief description/definition of, and the basic challenge of, Thomas Sowell’s “constrained vision” of humans.
2. Under the constrained vision of humanity, briefly describe one institution/policy that serves to benefit human welfare.
3. Give a brief description/definition of, and the basic challenge of, Sowell’s “unconstrained vision.”
4. Under the unconstrained vision of humanity, briefly describe one institution/policy that serves to benefit human welfare.
5. According to Adam Smith, how feasible and desirable is it for humans to be as sympathetic toward everyone as they are with each person’s close connections?
6. According to Hayek, give an example of an attitude consistent with family, small group, or kinship interactions and why does he argue that this is imbedded into human genes?
7. Name two institutions/practices that, according to Hayek, are consonant with “large orders” but not with “small orders.”
8. Draw supply and demand curves for a good, show the equilibrium price and quantity, and show the gains from trade, i.e., consumer and producer surplus. Explain how this illustrates the Smithian phrase: ” . . . he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.”
9. Is economic planning an activity done only by governments/central authorities?
10. What is the difference between “scientific” (general) knowledge and knowledge (specific/imbedded) of “particular circumstances? Is central planning more suited to environments where general knowledge or specific knowledge is most important?
11. What are the three fundamental aspects of ownership? Who holds these rights (predominantly) in a market-based economy?
12 In a market setting, how do prices (and profits) provide both information and incentives? Does this work without private ownership?
13. Sketch a graph of estimated GDP per capita for the Western world from 1000 to the present time. What are the approximate timing of inflexion points on your graph.
14. Name two other aspects of growth besides income per capita that are important to human welfare.
15. Rosenberg and Birdzell present a list of nine institutions that evolved that are favorable to commerce. Name one and briefly indicate why it is important.