EC 23 Homework

Due by email June 27.  Please bring a hard copy to class. You may collaborate in groups of up to three.

1.      Spell out in words an economic problem, the solution for which involves math. Such a solution may involve geometry, graphs, algebra, calculus, or even a use of a property of numbers.
2.      If you have a solution, keep it to yourself. Be prepared to explain whether you understand the solution. It’s ok not to have a solution, but you have to be prepared to challenge your classmates to give their solutions.

Hints: The problem may be a small almost trivial one, but should be interesting enough for class discussion. You may use any materials you can find in books or the Internet. You may seek help from students who have already taken the course on mathematical economics.

Just for illustration, here’s an example of such a problem from consumer theory:

“Define convexity in relation to indifference curves as representations of the utility function of a consumer. What might be the properties of these indifference curves if the goods considered are perfect substitutes? What if the goods are complements? What if the goods are imperfect substitutes?”

Extra credit for valor. You may submit the illustrative problem given above, but only if you have answers that you can defend in class.

Extra credit also for submissions of an easy but very illuminating question that shows the use of math in economics.

EC 12. Pointers No. 3

FAQs on Chs. 4 and 5 of Backhouse – England in 17th Century, France’s 18th Century

  1. The early ideas that became the foundations of political science or the scientific method are also important to economics. There were also contributions to economic data gathering and analysis from the 17th century. Summarize the ideas of: Thomas Hobbes (1588-1679); Francis Bacon (1561-1626); Rene Descartes (1596-1650); and Richard Petty (1623-87).
  1. What is Gresham’s Law on money? Explain.
  1. Richard Cantillon (1680-1734?) published a book (An Essay on the Nature of Commerce in General) which some scholars consider as marking the birth of economics. How did Cantillon defend his argument that the source of wealth was land and not labor? (Extra credit: What is the flaw in his argument? Hint: the answer is not given in Backhouse; you have to do some original thinking.)
  1. Summarize the economic thought of the French Physiocrats. Who were they, and why did they think as they did? In what way or ways were they clearly wrong? What did they contribute to economics that survive to today?
  1. How did Turgot (1727-81) define national wealth? What is the modern significance of this definition?
  1. Who are the two French economists who exerted an influence on Adam Smith? Extra credit: Explain. (This can be answered only after you have understood Smith’s contribution to economics.)

EC 12. Pointers No. 2

FAQs on Ch. 3 of Backhouse – the 16th Century

1.What historical event, centered in Italy, was of importance to the emergence of modern science? Explain your answer.

2.Copernicus thought that the earth revolved around the sun, instead of the other way around. What objection, in the form of a question, was raised by those who opposed Copernicus? Since Copernicus could not answer this question, who subsequently gave a reasonable answer or answers?

3.What were the two main scientific or philosophical contributions of William of Ockham? (Hint: One of these contributions is not mentioned in Backhouse, but you can try to Google the answer.)

4.In the medieval world view, sovereignty came from God, hence kings ruled by divine right. With the Reformation, what became the basis for the legitimization of sovereignty?

5.Who were the early rulers of nascent nation-states? What did they acquire with their rise to such positions?

6.Summarize the doctrines of mercantilism.

7.What did Machiavelli contribute to political science? Explain.

8.Summarize the economic thought of the School of Salamanca, especially in terms of how it differs from the previous thoughts of Aristotle and Aquinas.

Econ 12 – Assignments Nos. 2 and 3

Read Chapters 5 and 6 of Backhouse. Answer briefly the following questions (using also other material you can find from the references in the Syllabus).

Answers to questions 1-6 are due January 6.

1.What did Cantillon think about the problem of population? (2 pts.)

2.Turgot contributed to the modern economics definition of what constitutes wealth. What did he say? Re-state his thought in your own words. (2 pts.)

3.Quesnay, among the Physiocrats, argued that agriculture was fundamental. Was he right or wrong? Explain. (5 pts.)

4.Discuss how Quesnay and Turgot influenced Adam Smith. (4 pts.)

5.Summarize, in your own words, the evolutionary theory of social organization in the writings of the Scottish Enlightenment. (4 pts.)

6.Summarize Mandeville’s “Fable of the Bees.” (3 pts.)

Answers to questions 7-10 are due January 13.

7.What is the “invisible hand” in the work of Adam Smith? Quote the paragraphs in which these words appear in his writings. Explain in your own words, preferably in Taglish or Cebuano, how the invisible hand works. (20 pts.)

8.Would Adam Smith agree that ‘greed is good’? Why or why not? (5 pts.)

9.Did Smith, in arguing for free markets, also argue for only a limited role for government? Explain your answer. (5 pts.)

10.Did Smith see a role for government to maintain full employment? Why or why not? (4 pts.)