Bcor 1015 midterm exam Study guides, Class notes & Summaries

A) Hayek said, "Due to the underlying challenge of knowing the value of any given resource to any given individual at any place and time...." - ANSWER ..."decentralized market exchange facilitated via the price system allocates scarce resources more effectively than any other system of organization" What does Hayek believe regarding knowledge? - ANSWER - needed for rational economic order - markets provide systematic process that allows us to pool our individual knowledge - price signa...

Hayek's argument - ANSWER-He asserts that a centrally planned economy could never match the efficiency of the open market because what is known by a single agent is only a small fraction of the sum total of knowledge held by all members of society. A decentralized economy thus complements the dispersed nature of information spread throughout society. 3 main point of Hayek - ANSWER-Information is needed for rational economic order Information is decentralized dispersed knowledge Price m...

Hayek's argument - ANSWER-He asserts that a centrally planned economy could never match the efficiency of the open market because what is known by a single agent is only a small fraction of the sum total of knowledge held by all members of society. A decentralized economy thus complements the dispersed nature of information spread throughout society. 3 main point of Hayek - ANSWER-Information is needed for rational economic order Information is decentralized dispersed knowledge Price m...

The main economic questions (rational economic problem) - ANSWER-1. What product am I making 2. who is going to make it 3. who gets the product scarcity is either... - ANSWER-real or articficial hayek - ANSWER-believed that knowledge is incomplete, prices are the signals, decision making must be decentralized Hayeks view on markets - ANSWER-markets are a systematic process that allows us to pool knowledge hayek thinks economic problems arise due to ... - ANSWER-change Hayek th...