Part I: Read the following questions carefully and choose the best answer (20 pts)

1)

One of the following statements is Not True about characteristics of "Economic

Thought"?

A) Economic thought is not a fixed set of theories & techniques of anal ysis.

B) Economic thought is the product of time.

C) Anybody of economic doctrine/theory has limited validity.

D) History of economic thought is not basically a history of ideas.

E) None of the above.

2) All of the following are reasons for departure of scholars in economic ideas, ercept?

A) Lack of controlled experiments in the method.

B) Divergence of opinion on account of the attitudes of the economists.

C) Economic investigation is being undertaken based on individual's purposes.

D) Unanimity among economists in the assessment of facts.

E) B &C

3) Which one of the following statement is Not True?

A) Normative economics is value based while positive economics is fact based.

B) Positive economics are subjective while normative economics objective.

C) Positive statements can often be broken down into a cause and an effect.

D) The validity of normative statements can never be tested.

History of Economic Thought I

19) One of the following is not true about Jevons's formulation of value?

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A. Cost of production determines supply.

B. Supply determines final degree of utility.

C. Final degree of utility determines valuc.

D. The value of labor must be determincd by the value of the produce.

E. None of the above.

20) What makes Warlas different from his predecessors like Jevons, Menger and others is his

use of

A. the notion of equilibrium

B. the case of sectional equilibrium

C. the general equilibrium method

D. the partial equilibrium analysis

E. none of the above

Part II: Give Short and Precise Answers for the Following Questions (10 pts)

1. Whether positive economics or the art of economics should be the primary focus of

economics has prompted unending debate in the history of economic thought. Identify the two major
groups & their respective advocacy? 2

Mention the two sub approaches of Against Method philosophy and write on their basic

points.

Explain St. Aquinas's contribution on concept of Private property. How he defined and distinguished? 4.
To Smith, the state must adhere to the philosophy of laissez-faire. But unlike some of the

more eatreme advocátes of hat view, Smith did Bee a signiticant, rol for the state.

Discuss.

5. Briefly discuss on Malthusian "Theory of Gluts" contrast against Say's Market Law.

6. The central theme of Bentham's thought has been called Utilitarianism, or the principle ot the
greatest happiness. Briefly discuss on it.

.Brietly summarize on the essence of the Garman Historical School, what is their root school.

cause

against

classical
History of Economic Thought I

Econ-3141

15) One of the following statements is Not True about Ricardo's theory of distribution.

A) National income received by capitalists, landlords, and laborers.

B) Long run subsistence wage would not be cqual to the iron law of wages.

C) Profits are a residue equal to total product-less-rent minus wages.

D) Profits would be high or low in proportion as wages were low or high.

E) Wage is determined by the subsistence theory of wages.

Table: lours of labor necessary to produce a unit of wealth

Country

Wine

Coth

Domestic Barter Rate

Portug:a

100

50

1V:2C

Engiand 50

100

1C:2W

16) Given the above table, which one of the following statements is incorrect according to

Adam Smith's concept on international trade?

A. Trade between two countries will occur only if each country has an absclute cost advantagge.

B. England has an absolute cost advantage in wine and Portugal in cloth, hence, England shall specialize
in wine.
C. Portugal has an absolute cost advantage in wine and Engiand in cloth, hence, Portugal shall specialize
in wine.

D. Portugal shall specialize in cloth and export it to England because England can pay a higher price than
Portuga's domestic barter rate.

E. None of the above.

17) The founders and leading theoreticians of 'scientific, socialism were'?

A. Karl Heinrich Mark and Friedrich Engles

B. Pierre-Joseph Proudhon and Mikhail Bakunin

C. Hendy Comte'de Saint-Sinton and Charles Fourier

D. Wilhelm Roscher and Gustav Schmoller

E. None of the above

18) The basic ideas of Marginalism can be summarized as follows, except?

A. Marginal Utility became the primary force in the determination of value.

B. The marginalists continued the classical school's idea of 'laissez fair as the most desirable policy.

The marginalist analysis focused on an economic system based on pure monopoly

D. The margınalists are also known for their extensive use of mathematiCs.

m.

E. The marginalists believed that economic forces generally tend towards Cquino

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History of Economic Thought I

D) Communism

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E) None of the above

10) Not true about Stoicismn:

A) It is the prevailing philosophy, which transferred Greck philosophy to the Romans.

B) lt is a philosophy on rational, systematic universc governed by the law of natur.

C) IndiVidual happiness is achieved by conforming to inevitable law of nature.

D) The system of thought that combined the teaching of Christianity and the philosophy of

Aristotle.

E) All of the above.

1) The two cardinal economic doctrines of the middle ages are found in the notion ot

A) Just price and the Prohibition of usury

B) Public Finance and Joint Stock

C) Division of Labor and Law of Returns

D) Money and Interest

E) All of the above

12) One of the following is Not among the major tenets of Classicism?

A) Minimal government involvement

B) Self-interested economic behavior

C) Importance of selected economic resources and activities

D) Universal and immutable laws of economics

E) None of the above

13) Not true about David Hume's contributions to economics?

A) Wealth was measured by the stock of commodities of a nation, not its stock of money.

B) International trade is a positive sum game, not the zero-sum.

C) Introduction f the automatic "prica-specie flow" mechansm.

D) Introduction of the concept of price elasticity of demand.

E) None of the above.

14) Which one of the following is Odd to Adam Smith's view, which one?

A) Economic and social order was achieved in which the 'invisible hand' was given a tree hand to
operate.

B) He agreed that taxes should entirely be fallen upon the rent of land.
C) His major preoccupation was the nature and causes of wealth.

D) For him the capitalist collects profit because he is a supplier of capital.

E) Only B & C are odd to his view.

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Economic Thought I

History of

E) B&D

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4) All of the following statements are examples of positive economics, except?

A) A reduction in income tax will improve the incentives of the unemploycd to 1ind

work.

B) Resources are best allocated by allowing the market mechanism to work Ireely.

C) Cut-price alcohol has increased the demand for alcohol among teenagers.

D) Higher interest rates will reduce house prices.

E) None of the above.

5) Identify False statement about Logical Positivists

A) Veritication-a criterion of demarcation between scientific & non-scientific statementsS.

B) Verification- a proof of meaningful and meaningless statements.

C) Unscientific if a statement is empirically unverifiable.

D) Scientitic only if they are provable through observation and experimentation.

E) None of the above.

6) True statement about Sir Karl Popper, except?

A) Developed the theory of Falsification.

B) He pointed out that a theory may be meaningful without being scientilic.

C) If a statement, hypothesis, or theory is not falsifiable then it is not scientific.

D) For him only falsifiable statements are scientific and meaning ful.

E) None of the above.

7) He argued that it was fruitless to try to formalize 'the scientific method' as a well- defined

procedure,

A) Paul Feyerabend

B) Imre Lakatos

C) Karl Popper,

D) Thomas Kuhn

E) None

of

the

above

8) One of the following is Not among the major impediments that hinder the emergence ot

economic enquiry in ancient times?

A) The dominance of the State

B) The prevailing philosophy

D) Individuals' subordination

E) None of the above.

C) The

attitude

towards

want

satisfaction

9) St. Thomas Aquinas was influenced by Aristotle's view of, except

A) Nature and function of money

B) The inequity of money

C) The principles which should govern exchange

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