CHAPTER 12
Neoclassical Economics
Defense of Corporate Capitalism
MULTIPLE CHOICE
63. Which of the following was not an important early neoclassical economist? p132
a. Erving Segal
b. William Stanley Jevons
c. Karl Menger
d. Leon Walras
e. none of the above
64. Which of the following does not characterize neoclassical economics?p 133
a. the division of society into the working class, the capitalist class, and the landlord class.
b. the analysis of households and business firms.
c. the assumption that businessmen are motivated only by the desire for profit.
d. the belief that free competition leads to optimal results.
e.
65. The neoclassical theory of consumption p132
a. argued that it was not generally a fatal disease.
b. asserted that consumers would equate the additional utility per dollar spent, for the last
dollar spent on each commodity.
c. asserted that the total numbers of dollars spent on each commodity would be
proportionate to the prices of each commodity if the consumer maximized his utility.
d. argued that the utility of a commodity depended upon the price of that commodity.
e. none of the above.
66. The neoclassical theory of production p133
a. emphasized the importance of the social and cultural foundations of productive
technology.
b. stated that the last dollar spent on each factor should yield the same increase in
production from all factors.
c. showed the laborers could not be very productive if they suffered from inadequate food,
shelter, and clothing because they were paid such low wages.
d. showed that businessmen did not necessarily attempt to maximize profits in all cases.
e. all of the above.
67. Which of the following as not a modification of neoclassical theory that was frequently made
by neoclassical economists? p134
a. large-scale production means that some sellers will necessarily be large enough to affect
market prices.
b. the distribution of ownership of factors of production is so unequal that the entire system
is unfair.
c. some commodities that are consumed socially and are important to society even though
they may not be profitable for a capitalist to produce and sell.
d. the production of some commodities (e.g., automobiles) often involves social costs
(smog) that are far in excess of the private costs of the production.
e. none of the above.
68. The Social Darwinists believed that p135
a. competition is to be preferred to monopoly.
b. government intervention into the economy should be minimal.
c. the evolution of capitalism was led by the evolution of two new species, capitalists and
workers.
d. the people best adapted to society will be those who survive and prosper.
e. none of the above.
69. The magnitude of which of the followi
moral worth as far as the Social Darwinists are concerned? p135
a. wealth
b. I.Q.
c. kindness
d. creativity
e. knowledge
70. Herbert Spencer believed that government welfare programs p135
a. were insufficient to cure poverty.
b. retarded evolutionary progress.
c. accelerated evolutionary progress.
d. would be airtight if there were not so many lazy, able-bodied men on welfare.
e. would motivate unmarried women to have illegitimate babies.
71. Businessmen who were proponents of laissez faire philosophy p136
a. accepted many ideas of neoclassical economics.
b. accepted many ideas of Social Darwinism.
c. generally actively sought government intervention on their own behalf.
d. often equated business success with moral virtue.
e. all of the above.
72.
a. Pope Leo XIII.
b. Andrew Carnegie.
c. Simon Patton.
d. all of the above.
e. a and b.
APPENDIX 12.1
The New Paternalism and the New Deal
MULTIPLE CHOICE
73. The intent of the National Industrial Recovery Act of 1933 was
a. to turn over most industries to the government in order to stabilize the economy.
b. to promote greater business competition in order to weed out weaknesses in the economy.
c. to promote cooperation among businesses in order to promote fair competition.
d. to increase government oversight and regulation of business in order to combat
skyrocketing prices.