Self-study
P1
David Warsh's book describes a great contradiction inherent in economic theory since 1776, when Adam Smith published . ███ ██████ ██ ████████ █████ █████ ██ ███ ████████ ███████ ███ ███ ███████ ███ ███ █████████ █████
Intro topic ·
Warsh's book about conflict between Pin Factory and Invisible Hand
Conflict was part of economic theory since Adam Smith's Wealth of Nations.
P2
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Pin Factory ·
Increased efficiency through increased size
Pin factory's employees can make more by specializing on narrow tasks.
Invisible Hand ·
Acting out of self-interest can lead to common good
P3
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Conflict ·
Increasing returns from scale (Pin factory) leads to monopoly, which means Invisible Hand doesn't work
Invisible Hand requires many competitors in an industry.
Assumption underlying idea that free markets always get it right ·
Returns to scale are diminishing, not increasing
This assumption is the opposite of the Pin Factory model.
P4
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Why Pin Factory was de-emphasized ·
The model of diminishing returns was easier to represent mathematically
The Pin Factory model was more difficult to represent mathematically.
P5
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Pin Factory now mainstream ·
Once it could be described with enough math rigor, Pin factory entered mainstream
Passage Style
Single position
Spotlight
16.
The author's attitude towards the ████ ████ ███ ███ ███████ █████ ██████ ██ ████ ██ ███ ██████████ ██ ████████ ███████ █████ ████ ██████████ ██ █████████ ██ ███ ██
a
hostility
There’s no evidence of a negative attitude toward the Pin Factory model.
b
uncertainty
There’s no evidence of uncertainty toward the Pin Factory model. The author notes that the model of the Pin Factory “obviously” characterized many enterprises. So the author probably thinks it’s good that the Pin Factory became part of mainstream thought.
c
curiosity
There’s no evidence the author is curious about the Pin Factory’s becoming part of economic thought. She doesn’t ask more questions about it or suggest that there’s some mystery or further issues to investigate.
d
indifference
“Indifference” suggests the author doesn’t care about the Pin Factory becoming part of economic thought. This doesn’t fit, because the author has at least a slightly positive attitude toward this issue. After all, the author notes that the model of the Pin Factory “obviously” characterized many enterprises. So the author probably thinks it’s good that the Pin Factory became part of mainstream thought.
e
receptivity
This is the best answer. The author notes that the model of the Pin Factory “obviously” characterized many enterprises. So the author probably thinks it’s good that the Pin Factory became part of mainstream thought.