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

Chapter Two: Fundamentals of Economic Behavior 57 CHAPTER TWO: QUESTIONS FOR REVIEW 1. 1 Corinthians 12:7 states that “to each one is given the manifestation of the Spirit for the common good,” after earlier verses mentioned differing gifts. Explain how differing gifts (natural endowments) can lead to the common good in markets. 2. Sometimes markets don’t lead to a “common good.” Reviewing 1 Corinthians 12, can you identify why markets may fail to do so? 3. True or False. The following goods are scarce: a. Tickets to the World Series b. Air in the middle of Kansas c. The one and only incredible Stinking Machine, which no one can abideth in its presence 4. Explain why scarcity requires rationing. Does elimination of markets and rationing by price end the problem of scarcity? 5. Which of the following represents the opportunity cost of going to the basketball game this weekend if the ticket is $3? a. $3 b. The happy meal I could have bought if I didn’t spend the $3 on the game c. The walk I would have went on with my dog, my next best choice after going to the game 6. Lisa loves iPods; she has eight in different sizes and colors. So we know she’ll love another one. True or False? Why? 7. Institutions were identified as the driving factor in economic growth. Can you think why Christianity is a positive institution for economic growth? 8. Is it important that we understand how an institution supports economic growth for it to be able to do so? 9. Does emergent order imply a lack of planning? If not, who plans, and what do they plan? 10. Why does the concept of emergent order not preclude a role for God to act providentially? 11. Describe how the division of labor and gains from specialization could be applied to increase the production of a corner lemonade stand.