Economic Concepts and Theories

This set of flashcards covers essential economic concepts discussed in the lecture, focusing on definitions, implications, and real-world examples for each.

What does the Invisible Hand concept suggest about self-interest and society?

Pursuing self-interest unintentionally benefits society, but this can fail.

What are examples of people not maximizing utility?

People may prioritize ethics or emotions, such as buying local or donating.

What does rationality imply in economic decision-making?

Logical, calculated decision-making for personal goals.

How is Perfect Information defined in economics?

Everyone knows all relevant information before making choices.

What role does culture play in defining rationality?

Cultural norms can redefine rationality, prioritizing values like family over profit.

What does information asymmetry mean?

One party in a transaction knows more than the other, creating unfair advantages.

How does free-riding occur in economic terms?

Benefiting from resources or services without contributing to their cost.

What is the concept of embeddedness in economic behavior?

Economic behavior is rooted in social ties and relationships.

What are status symbols in the context of economics?

Goods used to signal social rank and reinforce inequality.

What does cultural capital refer to?

Non-financial assets, like knowledge and taste, that confer advantages.

What are fictitious goods according to Polanyi?

Land, labor, and money treated as market products, leading to potential exploitation.

What is the Double Movement in economics?

Society's pushback when markets threaten social welfare.

How does a market failure lead to social problems?

Markets often fail to allocate resources efficiently, causing issues like pollution.

What is a key argument made by Veblen regarding consumer goods?

People often buy goods for status rather than just need.

What influence do circuits of finance have on social groups?

Financial flows are tied to specific social meanings and patterns.

How might accidents of history influence current economic systems?

Random historical events can shape economic systems and market conditions today.

What is the modern dilemma regarding the concept of 'free markets'?

No market is truly free; regulations often shape outcomes.

How might gig economy jobs illustrate risks associated with commodifying labor?

Gig jobs can exploit workers and commodify the nature of work.