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

Chapter Two: Fundamentals of Economic Behavior 60 them because we don’t understand them, we will likely suffer negative economic consequences. 9. No. Emergent order simply implies that all planning is done by individuals, and the outcome that is the result of the cumulative plans of individuals will not have been planned by any one individual. 10. No. God is sovereign in all things, such that any order that emerges is either allowed by Him (permissive will) or desired by Him (perfect will). 11. For this question, however you think of the tasks of the lemonade stand, you could divide them between the available labor inputs. So if there were four tasks and two people, you could split them (in two if they were equally time consuming). As each worker gets really good at his or her assigned tasks, he or she could produce and sell more lemonade. 12. Since to choose to do one thing means you must give up another, we can’t do everything—there has to be a tradeoff. If we have to give up more of one good to produce another good than does somebody else, we should not produce that good but allow them. Then as we each produce according to what we do best, it will be in our interest to socially cooperate through trade. 13. The greatest good cannot be objectively known; we would have to make assumptions as to how people might value a given policy. Utility is an ordinal measure (cannot be measured, but only can be expressed as an order of preference). This leads to an impossibility of “scientifically” assessing the public interest. 14. False. It simply means that the next unit’s contribution to total utility will be less than the last. It will (usually) be positive. You can get to an extreme where more would actually be harmful, but that is not usually the case (such as if you eat so much you throw up).