No Free Lunch: Economics for a Fallen World: Third Edition, Revised

Chapter One: Introduction to Economics 31 CHAPTER ONE: QUESTIONS FOR REVIEW 1. Provide some initial thoughts on the following statement: “Jesus was a Communist. He was always in favor of the poor, and the early church in Acts had all things in common. Since God favors Communism, so should we.” Your ability to answer will improve in subsequent chapters, but you should begin thinking about this question now using some of the information presented in the first chapter. 2. True or False. The essence of economics is how we socially decide to allocate scarce resources such as labor and capital. 3. Karl Marx thought the onset of Communism and elimination of private property would lead to a new evolution of man: man would no longer act selfishly, but instead for the common good. Is this vision consistent with a Christian worldview, specifically the fallen nature of man? 4. What is meant by methodological individualism? Does this assumption preclude social considerations in individual decisions? 5. Compare and contrast objective vs. subjective value. 6. Cost/benefit analysis is fundamental to human action. Tracing the model of cost/ benefit calculation guiding choices, and choices guiding action, describe the likely action of Wendy’s reducing the price of their 1/4lb single value meal. 7. “If I make perfect choices with the knowledge I have, I will never be disappointed in the outcome.” Explain why this is not likely to be true in economics. Hint: Think about plan coordination. 8. We briefly reviewed three economic systems in this chapter. List them and describe how they treat ownership of consumer goods (like an iPhone) and capital goods (the factory that makes an iPhone). 9. As Christians, why should we think of stewardship responsibilities instead of private property rights? 10. True or False. Ludwig Von Mises thought free market economics was irrational since there was no central planner to direct the allocation of resources. 11. True or Fase. From the Acton video, Sam Gregg laid the blame for consumerism on free markets, and challenged the church to attack free markets.