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Honors 102
Key Concepts for Exam 2
(See also Key Concepts for Exam 1)
Fayazmanesh
Industrial Revolution
Definition and period
Economic sectors affected by Industrial Revolution
Spinning jenny, water frame (Richard Arkwright), spinning
mule, Eli Whitney’s cotton gin
Production of pig iron, wrought iron, and steel
Steam engines: Newcomen and Watt’s inventions
Agricultural Revolution: Crop rotation, advancements in
chemistry, advancements in equipments
Consequences of Industrial Revolution: Change in output,
demographic changes, social changes (balance of power
changes, unemployment, wages, and working conditions)
Corn Laws
Anti-combination laws
Communist Manifesto
Ricardo & Ricardian Economics
David Ricardo’s biography and writings
Ricardo’s aim in the Principles of Political Economy and
Taxation
Ricardo’s theory of rent
Net produce
Rate of profit in the agricultural and manufacturing sectors
of the economy and the falling rate of profit
“Stationary state”
Ricardo’s theory of value: reproducible and nonreproducible goods
Ricardo’s criticism of Smith’s labor commended theory
Problems with the regulation of value by labor
The concepts of past and present labor or dated labor
Calculation of values under the condition of wage-labor
and capital
Modification of labor theory of value
Circulating and fixed capital
The effect of changes in wage rate on value
“Invariable measure of value”
Neo-Ricardianism and Piero Sraffa’s Production of
Commodities by Means of Commodities
Natural and market prices
Ricardo’s method of political economy
Marx & Marxian Economics
Working class conditions at the end of the Industrial
Revolution
Radical movements: “Utopian socialists,” Anarchists, and
“Scientific Socialists”
The “League of the Just,” “Communist League,” and the
Communist Manifesto
Karl Marx’s biography
International Working Men’s Association and the Paris
Commune
Marx’s major writings: Grundrisse, A Contribution to the
Critique of Political Economy, Capital, Theories of Surplus Value,
Wage Labor and Capital, and Value, Price and Profit
Methodological and theoretical significance of Grundrisse:
Changes in the meanings of terms, new concepts and
theories, the distinction between form/content,
essence/appearance, etc.
The structure of A Contribution and its “Preface”: plan of
work and the “materialist conception of history”
Forces/relations of productions and economic
structure/superstructure
Stages of history
Capital, Volume 1: Chapter 1: "The Commodity"
Use-value, exchange-value and value
Labor and labor power
Concrete and abstract labor
Money, Circulation of Commodities, and the General
Formula of Capital
Labor Process and the Capitalist Production Process
Production process and surplus value
Necessary labor and surplus labor
Absolute and relative surplus value
Constant Capital, Variable Capital, and the Value of Output
Rate of Surplus Value
“Many Capitals,”competition, and the rate of profit
Prices of Production
Composition of capital
Value of “social capital”
Profit of Enterprise, Interest, & Rent
Productive capital, interest-bearing capital, and landed
property
Cyclical and secular Crisis
Marx's method of political economy
Introduction to Neoclassical Economics and the
Marginal Revolution
The origin of the term “neoclassical”
Bentham’s utility theory
Developments in mid-19th century mathematics
Calculus of variation
Lagrange multiplier
Utility as a function: Total utility, marginal utility, and
diminishing marginal utility
Stages in the development of neoclassical “utility” analysis: 1)
Measurable, independent and additive utility, 2) Utility
surface, 3) Indifference curve analysis
First stage: William Stanley Jevons, Leo Walras, Carl Menger,
and Alfred Marshall
Principle of maximization of utility or equi-marginal
principle
Second stage: Francis Ysidro Edgeworth and Irving Fisher
Third stage: Vilfredo Pareto, John R. Hicks and Paul
Samuelson
Cardinal and ordinal utility measurement
Indifference curves and the budget line
Slope of the budget line and relative prices
Derivation of individual demand curve and market
demand curve
Principle of utility maximization: indifference curves and
the budget line
Derivation of demand curve: indifference curves and
budget lines
Market demand, market supply and the equilibrium price.
John Bates Clark
Honors 102
Sample Essay Questions
Fayazmanesh
1. What were the social, political and economic
consequences of the Industrial Revolution in England?
How did these changes influence economic theories?
2. Explain David Ricardo’s theory of rent (make sure to
give a numerical example). What is the significance of this
theory for distribution of income and the rate of profit in
economy?
3. What was Ricardo's criticism of Smith's theory of value
and how did his own theory of value differ from that of
Adam Smith?
4. Using a numerical example, explain how Ricardo’s
determination of value by labor is modified when wagelabor and capital are introduced.
5. In light of what we have studied in this course, discuss
Marx's critique of the method of classical political economy
and his own method of economic analysis.
6. Critically evaluate Marx's arguments in his famous
"Preface" to A Contribution to the Critique of Political Economy.
7. Does Marx’s economic theory exhibit a Kuhnian
“paradigm change” relative to the theories of the classical
economists? If yes, explain why. If not, explain why not.
8. Using a numerical example, explain Marx’s transformation
of values into "prices of production." What is the
significance of this transformation? What does this
transformation tell us about Marx’s concept of science?
9. Explain the so-called three stages in the development of
neoclassical “utility” analysis. Explain how each stage
supposedly improves the theory. Also, explain how the
developments in the 19th century mathematical physics
influenced the development of utility theory.
10. It is usually argued that around 1870s a “marginal
revolution” occurred in economic theory. Explain the
nature of this revolution. Does this “revolution” have the
characteristics of a Kuhnian “scientific revolution”? If yes,
explain why. If not, explain why not.