StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Reading commentaries (( economics )) - Assignment Example

Cite this document
Summary
Date Chapter 14 of the book dwells on the thoughts and influences of neoclassical economists, whose ideas had a profound and pervasive impact on the political, social and economic arena. Neoclassical economic theories formed the benchmark for modern economic theories…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER94.8% of users find it useful
Reading commentaries (( economics ))
Read Text Preview

Extract of sample "Reading commentaries (( economics ))"

Download file to see previous pages

The chapter brings readers to attention of the failure of neoclassical theorists to recognize the upheavals that capitalism was going through, which culminated into emergence of new schools of thought by such economists as Bastiat. Capitalism was subverted by a tinge of imperialism, coupled by a severe depression that ultimately resulted in the Great Depression (Hunt and Lautzenheiser 372). Neoclassical economists assumed normal periods of boom and depression. They also assumed that the economy had self-correcting mechanisms which would automatically fall in action whenever the economy underwent depression.

Social unrests such as the World War 1, emergence of fascism and Soviet Revolution had a pervasive effect on the stability of capitalism. The chapter reveals that this instability marked the departure of such economists as Keynes from the classical school of thought. Keynes felt the need to reassess his thinking or ideas which were hedged on classical school of thought. In explaining the failures of the classical economists, the chapter brings to light two untenable issues that dominated the classical theories.

The first issue relates to the concept of utility. . Classical economists assumed that in equilibrium, the entrepreneur did not make profits. They also failed to analyze the negative features associated with the production process under capitalism. The concept of utility and maximizing profits is clearly elaborated in the chapter. Consumers seek to maximize utility out of a given bundle of good while firms seek to maximize profits. The chapter notes that classical economists came up with abstract ideas to explain the concept of utility maximization.

For example, classical economists used indifference curves in their explanation of utility concept and diminishing marginal utility. Classical economists assumed an ordinal approach to consumer preference. The authors have dismissed this as “conceptually impossible” (Hunt and Lautzenheiser 374). A graphical approach has enabled readers to understand the concept of maximizing utility. The assumption here is that there is consistency in the choice made by consumers and that there are only two commodities involved (Hunt and Lautzenheiser 376).

The level of consumers’ income acts as the budget constraint. The concept of indifference curves enabled marginal utility of goods to be measured through analysis of the slope of indifference curves. The concept was also important in determining the equilibrium point at which a firm should produce through the use of isoquants. The chapter also explains how a production possibility frontier was used to arrive at combinations of goods that could possibly be produced in a situation whereby there was efficient utilization of capital and labor in the society (Hunt and Lautzenheiser 375).

The chapter has devoted to highlighting key criticisms of the neoclassical economics in order to enable students construct balanced opinions. The

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Reading commentaries (( economics )) Assignment Example | Topics and Well Written Essays - 750 words”, n.d.)
Reading commentaries (( economics )) Assignment Example | Topics and Well Written Essays - 750 words. Retrieved from https://studentshare.org/macro-microeconomics/1475242-reading-commentaries-economics-
(Reading Commentaries (( Economics )) Assignment Example | Topics and Well Written Essays - 750 Words)
Reading Commentaries (( Economics )) Assignment Example | Topics and Well Written Essays - 750 Words. https://studentshare.org/macro-microeconomics/1475242-reading-commentaries-economics-.
“Reading Commentaries (( Economics )) Assignment Example | Topics and Well Written Essays - 750 Words”, n.d. https://studentshare.org/macro-microeconomics/1475242-reading-commentaries-economics-.
  • Cited: 0 times

CHECK THESE SAMPLES OF Reading commentaries (( economics ))

The future of the US Dollar

The Future of the U.... .... Dollar Date The Future of the U.... .... Dollar Since 1944, when the United States and other countries agreed to exchange the dollar for gold, several currencies became pegged to the U.... dollar.... This continued even after 1971 when U.... broke the agreement.... hellip; U....
4 Pages (1000 words) Case Study

The Different Explanations for the Emergence of Classical Law

(1973) commentaries on the Laws of England.... CONTRACT LAW: THE DIFFERENT EXPLANATIONS FOR THE EMERGENCE OF CLASSICAL LAW Name: Introduction Different schools of thoughts have different contribution on the emergence of classical law.... However, the classical law emerged during the industrialization in the early nineteenth century....
8 Pages (2000 words) Essay

Green Thinking and Green Product Design

This essay "Green Thinking and Green Product Design" will deal with the study of the various changes that have occurred to green thinking in the recent periods.... This is significant for determining how to sustain the emerging technology of 3D and whether it is suitable for the contemporary world....
4 Pages (1000 words) Essay

Comparing Federal Republics: United States and Switzerland

A WORLD OF STATES AS SEEN THROUGH THE U.... AND SWITZERLAND Instructor Institution Submission Date Introduction In comparing countries and their political, social cultural as well as economic systems, it is critical to dig into the history and background to get a better understanding of the different structures and policies that exists....
10 Pages (2500 words) Essay

Governing Global Business

The paper “Governing Global Business” focuses on Large Transnational corporations, which have been rapidly growing through mergers and acquisition and their profits have been greater than the gross domestic products of some low and medium earning countries.... hellip; The author states that the TNCs are driving the individual economies of in the civil society placing a critical trend in the eco-system, they set salary levels which causes the rest of the world economies to incline their demands and so forth....
7 Pages (1750 words) Assignment

Rachel Carson in Environmental

These commentaries open up new ways of looking at environmental problems posed by pesticides, but also shed light on the fundamental political, economic, and technological challenges that must be overcome.... This essay describes Carson's environmental concerns and extends the political, economic, and technological commentary of the author....
2 Pages (500 words) Essay

Reading response

This reading highlights the suffering of several women through reproductive and family histories, subjective commentaries, and employment and migration histories.... In addition,… This essay is a perspective on, and critical analysis of the authors idea based on the reading's core theme of association between a mother's capacity     Reading Response Introduction This reading highlights the suffering of several women through reproductive and family histories, subjective commentaries, and employment and migration histories....
2 Pages (500 words) Essay

How Economists Have Recognised Psychological, Social and Corporate Influences on Consumer Choice

There is an aspect of economics that is directly tied with the consumer and their psychologically-driven buying behaviors as well as their complicated social demands related to peer interaction or the relation of a specific product with their unique, segmented lifestyle habits.... These are aspects that today's business use in their marketing strategies, which illustrate how economics and marketing are closely related.... Consumer attitudes and beliefs can dramatically impact the economics of supply and demand, which creates a concern for businesses and economists alike....
8 Pages (2000 words) Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us