I recommended reading Russ Roberts’ book The Price of Everything here. Today, Russ Roberts posted a set of study questions used by Steven Horwitz in his class.
I’m keeping a set handy to spur a discussion for those who I get to read the book. The questions are below the fold.
1. At the end of chapter 2, Ruth insists that despite the fact that companies have bosses, “no one is in charge” and that no one sets the price of goods and services. Explain what she might mean by that and how it relates to our discussions in class.
2. In chapter 4, Ruth claims that the flock of birds as a whole is smarter than the smartest bird in the flock. What’s the equivalent claim about how markets work? Give an example.
3. At the end of chapter 4, Ruth engages the class in a discussion about “price gouging” and price controls. Use supply and demand curves to illustrate her point about gas prices after Hurricane Katrina.
4. In chapter 6 (p. 73) Ramon says “But I want a world where flashlights are both cheap and available! Why can’t we have both?…You’re the economist. Tell me why we can’t do better.” How would you answer Ramon?
5. Explain the distinction between “pro-business” and “pro-market” that Ruth invokes in chapter 9 (p. 123). Why do you think people confuse those two ideas? What do you think of Ruth’s answer to Ramon?
6. On p. 135 in chapter 10, Ruth analogizes economic evolution to biological evolution, but she’s careful to note that unlike genetic mutation, “economic evolution isn’t random.” Why isn’t it? What makes it possible for individual humans, firms, and households to engage in economic behavior that isn’t random? How is it that even as they are all very “purposeful,” the outcome of their actions reflects none of their intentions?
7. Later in chapter 10, Ruth says “As we destroy jobs, we get wealthier.” What does that mean? Give an example other than the ones Ruth provides.
8. Who or what is the “weaver of dreams?” Explain your answer.
9. What did you think of the book overall? Did you like it or not? Did it help you understand the course material? What worked and what didn’t?
10. Do you think the book was valuable enough to be required reading the next time I teach the course? Why or why not?
11. BONUS QUESTION: on p. 156, Ruth struggles with a crossword puzzle clue. What’s the right answer that she can’t get? Why is this absolutely the funniest moment in the book?