what are the following: 1)scarcity question/over consumption 2)classical school
ID: 1141919 • Letter: W
Question
what are the following:
1)scarcity question/over consumption
2)classical school versus Keynesian school
3)old Idaho pickup versus Swiss watch analogy of Keynesian versus Classical Schools
4)Political paradigm: liberal, conservative, totalitarian, libertarian
5)Adam Smith’s invisible hand: self-interest versus the social interest
6)Smoot-Hawley Tariff Act
7)Comparison of Great Depression (1930s) to the Great Recession (2007-2009)
8)fallacies in economics: post hoc fallacy - fallacy of composition
9)policy issues where economists tend to differ from the general- public
10)ceteris paribus
11)scientific method, economic model, correlation versus causation
12)opportunity cost, total costs, total benefits, marginal cost, marginal benefit, marginal analysis
13)trade-offs: What trade-offs, how trade-offs, and for whom tradeoffs.
14)big trade-off: Equity versus efficiency
Explanation / Answer
1.
Scarcity exists in an economy when the resources are limited in comparison to human wants which is the basic problem in every economy. This gives rise to the needs of allocating resources efficiently. In contrast, overconsumption is a situation where usage of resources has outpaced the capacity of the ecosystem. It reflects the problem of human overpopulation giving rise to an excessive demand for the limited goods and services.
2.
Classical and Keynesian school of thoughts represent the types of theories used in Economics. a major difference is that Classical approach believes in the free market economy without government intervention and Keynesian approach gives emphasis on governments role in maintaining stability in an economy. Both have different means to approach a problem. While Keynes aims to deal with short-run problems Classical resort to inducing long-run growth in the economy.
3.
Free market economy believes that government should just satisfy the structural requirement of an economy which is analogous to a Swiss watch. Under Keynesian school, even the free market encourages the government to be involved in production. Such an economy is analogous to Old Idaho pickup. i.e though free market is powerful it requires a mechanism to keep running efficiently and that is a government.
4.
While liberal and conservative are poles apart where former is the desire to create more free and egalitarian society, latter resides on traditionalist norms of society and maintain status quo but they believe in economic and business freedom.
Totalitarianism is the most extreme form of authoritarianism which beliefs in full government control and no individual opposition to the state and a high degree of control over their public and private lives. On the other hand, Libertarianism is based on the core principle of liberty which represents a collection of political philosophies emphasizing freedom of choice, voluntary association, and individual judgment.
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