Rule of Law Principles
Economics
Economics and Markets Cont.
Lecture Videos
Other
100
Generality
Laws must apply to broad categories of people. In creation of legislation, we shouldn’t know who will be affected
Bonus 50: give me an example of how this could be violated
100
Def Law of demand
Inverse relationship between price and quantity demanded for a good (price goes up, demand goes down, vice versa)
100
Author of The Wealth of Nations
Adam Smith
100
We watched a video about utilitarianism, one involving a trolley/streetcar. What was the principle in the video?
The video displayed a car going towards 5 workers on the rail, but if the driver switched rails, it would only hit one. Hitting one would make sense from a utilitarian perspective, but it's hard for us to make that choice.
100
Why were donuts sold in class? (how did the professors use them as a teaching tool?)
They began a discussion on how scarce goods are allocated. In a free market, prices do a decent job of allocating them (at the price the dozen donuts was purchased for, the supply and demand were both one. Therefore, it was the equilibrium price).
200
Prospectivity
Laws must apply to the future
Bonus 200: violations of this principle are called what?
200
Define Law of Supply
Direct relationship between price and quantity supplied for a good (price goes up, supply goes up, vice versa)
200
Define opportunity cost
The cost of the next best alternative option
200
What principle was illustrated by the clip from Monty Python?
The debate of where sovereignty came from--divine right of kings or from the people.
200
What are the four stages of the human predicament cycle?
Tyranny, revolution, anarchy, competing groups
300
Publicity
Laws must be broadly known and certain
Bonus 50: give me an example of a violation
300
Define Equilibrium price
The price at which buyers want to buy and sellers want to sell
300
How does Adam Smith use the term 'invisible hand' to describe the market?
"By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it”
300
What principle was illustrated in the video of the TV show 'Community' with a debate team debate happening in the school gym?
The argument between whether humans pursue self interest or virtue (he caught him so he's virtuous, he dropped him because of a girl, so he's self interested)
300
What is telos?
The purpose of something that is more important than its individual parts. The goal, purpose.
400
Consent
Laws must be generally accepted by the people/governed, and the people must have a way to change them if need be (elections, amendments)
400
"Anarchy is not a market". What are 3 of the governments roles in a market?
Prevent coercion and fraud, subsidize the creation of transportation networks to expand trade opportunities, define and enforce property rights, enforce exchange agreements, provide money (bonus 100, why is money important?
400
Define Mercantilism
Stockpile gold and silver, more exports, government run economic system
400
What principle was illustrated in the lecture clip showing all the steps in the beef supply chain (giving a New Yorker beef in the supermarket)?
This talked about greed, and about how everyone in a free market pursues their own good, and in doing so also promotes the good of the whole society. It is as if Adam Smith's idea of an 'invisible hand' regulates the market.
400
What are the 4 solutions to collective action problems?
Selective incentives, political entrepreneurs, ideologies/belief systems, government coercion
500
Due process
In the application and enforcement of the law, justice must be blind. Trials, arrests, and punishments must be fair, equal, and consistent.
500
Define the Role of Profits
Excess of revenues after costs send signals to businesses on how to allocate their resources. Large profits in one industry will lead to more/larger businesses in that industry
500
What is the law of comparative advantage?
Everyone is the low cost producer of something, and that is what they should specialize in.
500
There was a video (albeit rather comical) detailing cat herders. What was the point of this video?
Illustrated a collective action problem of getting all the cats to do what the herders wanted.
Bonus 200 points: define a collective action problem
500
Which 2 Christian theologians were the backbone of Puritan thinking?
Martin Luther and John Calvin