The Neoclassical Axioms Placed On Individual Preferences Economics Essay

The Neoclassical Axioms Placed On Individual Preferences Economics Essay Critical Analysis of the Neo Classical consumption theories of Marshallian Utility analysis and Hicksian Indifference analysis. In place of the concept of utility by Alfred Marshall, the indifference curve technique has introduced the term preferences; instead of the cardinal number system, which is said to measure the strength of a consumers desire, the indifference curve substituted ordinal number system of first, second, third etc., to indicate the consumers scale of preferences. The concept of marginal utility has been replaced by the marginal rate of substitution. And against the Marshallian proportionality rule to describe the consumers equilibrium, indifference curve technique has advanced the equality between the marginal rate of substitution and the price ratio. Unrealistic The Marshallian assumption of cardinal measurement of utility is very restrictive. It demands too much from the human mind. Utility is a mental phenomenon and the precision in the measurement of utility assumed by Marshall is unrealistic. It is criticised that new theory of indifference analysis only jumps from the frying pan of the difficulty of measuring utility into the fire of the unreality of assuming consumers complete knowledge of all his scales of preferences or indifference map. The indifference curve technique envisages a consumer who thinks of innumerable possible combinations of goods and his relative preferences for them. Absurd Indifference curves include even the most ridiculous combinations which may be far removed from a consumers habitual combinations. For example, while it may be perfectly sensible to compare whether three pairs of shoes and six shirts would give him as much satisfaction as two pairs of shoes and seven shirts Introspective Both the approaches of Marshallian Utility analysis and indiffence curve technique are based on the psychological or introspective method. The law of diminishing marginal utility, which is psychological in nature lies at the bottom of law of demand. Indifference curve too is based on introspection. This technique is criticised as introspective and hence Samuelson introduced behaviourist method of devising demand theory. Relation of Transitivity objected Armstrong has criticised the relation of transitivity involved in indifference curve technique. According to him, the consumers indifference arises from his inability to perceive the difference between alternative combinations of goods. This is due to the fact that the difference is too slight to be noticed. If that is true, the relation of indifference become non-trasitive. This knocks the bottom out of the whole system of indifference curve analysis. Limited empirical Nature In Hicks-Allen theory, indifference curves are based on hypothetical experimentation. They are based on imaginary indifference curves, although attempts have been made recently to derive them experimentally. The theory of Revealed Preference is associated with the name of Paul Samuelson and the theory is called the behaviourist ordinal utility theory. Instead of the unrealistic assumptions that the consumers operate with a complete and consistent scales of preferences set out in the form of indifference curves, most economists now prefer to analyse situations in which their hypothesis can be tested. Both Marshallian utility analysis and Allen-Hicksian indifference curve technique apply the introspective method or the subjective method. But Samuelsons revealed preference theory makes use of hypotheses which are observable and testable. There is thus a shift from the psychological to behaviouristic explanation of consumer behaviour. According to the revealed preference theory, the consumer is supposed to reveal the nature of his preferences. He shows the goods he would prefer to purchase in a given situation even though he may not be able co to show his scale of preferences on an indifference map. Thus, in a theory of revealed preference, it is unnecessary to assume that the consumers can describe their preferences on indifference map. This is the most important merit of the revealed theory. Also, as Sir Johns Hicks observes, revealed preference theory lends itself to use by econometricians. Axioms of Revealed Preferences Rationality It is assumed that the consumer is rational or ideal. That is, the consumer seeks to maximise his satisfaction from the resources he has. He will choose a combination of goods which he seems most satisfying.i.e., which he prefers the most. In one set of market conditions, he selects one combination and his choices will be different under different market situations. Consistency It is also assumed that the consumers choices are consistent. The choices of actual consumers may not be consistent but those of the ideal or rational consumer may be supposed to be consistent. This consistency implies means, for instance, that if a particular combination of goods P is better than Q combination and Q is better than R, then P must also be assumed to better than R. Transitivity Transitivity ensures that there should be no such circular relationship. That is if P is better than Q and Q is better than R, then R will never better than P or Q will never better than P. Positive Income Elasticity of Demand Another very important assumption underlying revealed preference theory is that the income-elasticity of demand of the consumer must always be positive. That is, if his income increases, his demand for the commodity must also increase; it should not remain the same (i.e., zero elasticity) and it should not also decrease (i.e., negative elasticity) as it happens in the case of inferior goods. Strong Ordering A distinguishing feature of Samuelsons revealed preference theory is that of Strong Ordering. In a strong ordering, each item in a consumers scheme of purchases is assigned a definite place or number and at each number there is only one item so that the consumer definitely reveals his preferences. For instance, a consumer reveals his preference when he is observed to choose, say Q combination of goods in preference to all others and he rejects the rest, In other words, choice reveals preference by choosing one combination and rejecting others, the consumer has shown his definite preference. As indifference advocates in Weak Ordering there may be some items which cannot be arranged in order or preference, so that the consumer is unable to indicate which items he prefers to which. As the combinations of goods on the same indifference curve are concerned because they represent the same level of satisfaction. Since they are equally satisfactory, the consumer can not reveal his preference. The conventional indifference curve is an illustration of weak ordering because all points on the same indifference curve are equally prefereed to represent a non-ordered group. The assumption under lying the indifference curve technique, viz., that a consumer is capable of ordering all conveivable alternatives indicated by several points on the indifference curve, appeared obviously to be unrealistic. Samuelson, therefore, rules out the possibility of weak ordering. By revealing the preference, the behaviour of the consumer is reflected. That is how the revealed preference theory derives a demand theorem from the actual observed behaviour of the consumer. The axiom of strong ordering provides the necessary operational link between observed choice behaviour and the behaviourists welfare conclusions. Thus, the relation of indifference is rejected on operational grounds. Demand Theorem By revealed preference hypothesis, Samuelson has tried to demonstrate inverse relationship between price and the amount demanded by assuming income elasticity of demand to be positive. Samuelson state the demand theorem under the title Fundamental Theorem of Consumption Theory as any good (simple or composite) that is known always to increase in demand when income alone rises must definitely shrink in demand when its proce alone rises. In this proposition, income elasticity of demand has been assumed to be positive. This theorem can be illustrated by the following diagram. In this diagram consumers income in terms of good X is shown by OB and in terms of good Y by OA. If he spends his entire income on these two goods X and Y, AB is the price line. It is assumed that the consumer choose the combination represented by Q on the price line AB as giving him the maximum satisfaction. If the price of X rises, then the new price line will be AC by contracting the demand of X from OB to OC. In this situation, Q which put the consumer in equilibrium before, becomes now beyond his reach. In order to achieve the same combination of Q, consumer is compensated with an extra income to overcome the higher price resistance and new Price line DE parallel to AC but passing through Q is drawn. CE amount money is needed to attain this new price line and this extra money is called as Over Compensation Effect by Samuelson. Since Q combination becomes available, he will not choose any combination lower than Q (i.e., QE part of DE) If he selects Q, it means that he selects the same amount the goods X and Y as before. If he chooses any combination above Q on QD portion of DE, it means that he selects less amount of good X and more amount of good Y. This shows the substitution effect of the price rise. Merits of Revealed Preference Theory There is no doubt that it is an improvement on the Marshallian utility analysis and Hicks-Allen indifference curve technique. It is behaviouristic and draws the demand theorem from the actually observed behaviour of the consumer. On the other hand, both Marshallian Utility analysis and the Hicks-Allen indifference curve techniques are introspective and give psychological explanation of consumer theory. The revealed preference theory studies not an ideal or imaginary consumer and hence, it is more scientific and realistic. Behaviourism has the great advantage of treating the things based on observation and it will never be wrong. Revealed Preference analysis steers clear if tge dubious assumptions upon which the earlier theories were based. Both Marshallian Utility analysis and indifference technique were based on the utility maximisation principle which is more restrictive and difficult to be realised. On the other hand, Revealed Preference theory steers clear of the utility maximisation principle and uses instead the consistency principle to derive the demand theorem. Consistency axiom is less restrictive and more realistic. Indifference analysis is based on the assumption of continuity while Revealed Preference theory does not assume continuity. Indifference curve is continous in the sense that it depicts all conveivable combinations some of which may be so unrealistic as to be ridiculous. That is why Prof. Samuelson gave up the assumption of continuity. Although price line is drawn continuously, yet no continuity is actually involved because the theory is based on the actually observed choice of the consumer from among such combinations as are actually available in the given price-income situation. Conclusion `1` With all the flaws in the revealed preference theory, it is to be admitted that this theory is superior to other demand theories in that it applies a scientific and behaviouristic method to consumers demand. By waving out the assumption of continuity and utility maximisation, the consumer theory put forward by Samuelson has become less restrictive and his enunciation of the preference hypothesis makes a valuable contribution.

International Relations Glossary

A form of political organization under which a relatively homogeneous people Inhabits a sovereign state Sovereignty Denotes a single, supreme political decision-making authority. In early modern Europe the Monarch was the Sovereign. In modern states sovereignty tends to lie with the executive arm of government. A controversial term, sovereignty relies on authority, not power. That is, the sovereign claims the right or authority to decide matters of interest to the state, even if it cannot control everything that occurs within its territory. MedievalOf or relating to the period of European history from about A. D. 500 to about 1500. Feudalism Feudalism was the medieval model of government predating the birth of the modern nation-state. Feudal society is a military hierarchy in which a ruler or lord offers mounted fighters a fief (medieval beneficial), a unit of land to control in exchange for a military service. The individual who accepted this land became a vassal, and the man who gr anted the land become known as his liege or his lord. Individualism A social theory advocating the liberty, rights or Independent action of the Individual.Liberalism A political theory that prizes Individual freedom. It believes Individuals should be free to do as they please, without the interference of others. So long as they don not harm or limit the freedom of others. In IR it has tended to focus on the development of international law, the spread of democracy and the expansion of free trade, in which Emmanuel Kant is one of the leading theorists. Communitarian's A political theory that emphasizes individuals' attachments to the community in which they grew up.The communities in which we grow up are thought to be the resource of moral values. Communitarian's adopts the ethical position that a person's moral obligations are always first and foremost members of our own community and that they cannot be extended beyond that communities boundaries. Liberal Internationalism Woodrow W ilson, thus sometimes being referred to as Williamson'. Wilson suggested that the cause of instability and conflict was the â€Å"undemocratic nature of international politics†, particularly in regards to foreign policy and the balance of power.Having identified the cause of conflict, it is possible to suggest that the aims of Iberia internationalism are expanding democratic practices and free trade, defending democracy from its rivals while protecting and promoting human rights. Harmony of interests The idealist concept of the harmony of interests is based on the notion that human beings can rationally recognize that they have some interests in common, and that cooperation is therefore possible. Democratic Peace Theory The theory that democratic states do not fight war against each other.A good amount of empirical evidence has been collected indicating that war has never been fought teen two stable democracies. Closely associated with Michael Doyle. International Institution s International institutions be defined as relatively stable sets of related constitutive, regulative, and procedural norms and rules that pertain to the international system, the actors in the system (including states as well as non-state entities), and their activities. Interdependence The mutual dependence developed among states by utilizing new technologies and through the growth of international cross-border commerce. Communication and travel.A term used before globalization became popular. Anarchy The absence of rule or government. In international relations it does not mean disorder and chaos. Power Classically defined as the ability to get an actor to do what they would otherwise not do. This is power in the sense of domination or power over others. But power can also be thought of in terms of capability or power to do or act. Realist theories hold the belief that international relations are a constant struggle for power, usually defined by material terms. National Interest A notoriously plastic term that refers to the states foreign policy aims.The national interest is said to be the same regardless of the government in power, but different governments will hold different ideological agendas and priorities, meaning that national interest will change accordingly. Refers to a mechanism that operates to prevent one state from achieving such a preponderance of power that it is in a position to lay down and enforce the law over all such others. Central to realist theories, it can be viewed as the deliberate product of foreign policies, or as the unintended consequence of several states seeking to protect themselves.In any case, states align with others to counter-balance the growth in another's power, seeking to preserve international order and a degree of equilibrium. International Community vs. international system An international system exists when two or more states have sufficient contact with each other that they become conscious of existing in the same environment and conscious of the need to consider other states interests and capabilities in the pursuit of their own interests.Globalization The stretching and intensification of social and economic relations across the globe dad possible by new communication and computer technologies and advances in transport. It is thought by many to inaugurate an unprecedented degree of global interconnectedness, although some deny its novelty by pointing to similar levels of interdependence in the late nineteenth and early twentieth century. Still others criticism globalization for being a vehicle of inalienable theory. Non-state Actor An actor not part of the official state or governmental apparatuses.Non-governmental organizations Specializes not-for-profit non-state actors that seek to raise consciousness and hanged the activities of governments and populations on a variety of issues. Nooks have proliferated over the last century, advocating and lobbying on issues such as human rights, landmines, poverty, animal rights and the environment, among many others. Civil Society Simply refers to those who act in international politics but are not a member or representative of any particular state. Social Movements. Denotes some kind of collective action, driven by a particular set of social concerns and emerging from society at large.Modernity A modern way of thinking, working etc. The schism between domestic and international politics in international relations. The clash of civilizations The cause of conflict in the 21st century will not be political or economic, but cultural. Different cultures have different ways of organizing society and this will be the cause of conflict. He cites Western, Slavic Orthodox, Hindu, Islamic, Japanese, Latin America, African and Confucian as the main civilizations. Cosmopolitan Democracy Cosmopolitan democracy is a political theory which explores the application of norms and values of democracy at different levels, from global to local .It is about what global governance of the people, by the people, for the people can mean. Asian Century The dominant role that could be played by Asia in the 21st century, because of its growing economic clout and global demographic trends. â€Å"Asian Century† as a theme, has gained credence following the rapid economic growth of China and India since the asses, which has propelled them to the top ranks of the world's biggest economies Mercantilism The main economic system used during the sixteenth to eighteenth centuries.The main goal was to increase a nation's wealth by imposing government regulation uncovering all of the nation's commercial interests. It was believed that national strength could be maximized by limiting imports via tariffs and maximizing exports. North-south gap The North-South divide is broadly considered a socio-economic and political divide. Generally, definitions of the Global North include the United States, Canada, developed parts of Europe, and Ea st Asia. The Global South is made up of Africa, Latin America, and developing Asia including the Middle East.Unilateralism An approach to economics and social studies in which control of economic factors is hefted from the public sector to the private sector. Drawing upon principles of neoclassical economics, unilateralism suggests that governments reduce deficit spending, limit subsidies, reform tax law to broaden the tax base, remove fixed exchange rates, open up markets to trade by limiting protectionism, privative state- run businesses, allow private property and back deregulation.Focuses on the interplay between political power and economic forces from the national through to the international and global level, whilst also taking account Based on liberal theories of economics, 1944 saw the meeting of 44 states at Breton Woods, where the new economic order was constructed and the multilateral institutions of the WEB, MIFF and GAIT were established.Hegemony Domination by a great power and its allies Washington Consensus This is the set of 10 policies that the US government and the international financial institutions based in the US capital believed were necessary elements of â€Å"first stage policy reform† that all countries should adopt to increase economic growth. At its heart is an emphasis on the importance of macroeconomic stability and integration onto the international economy – in other words a neo-liberal view of globalization.Rationalization The process of dividing an area into smaller segments called regions. One of the more obvious examples of rationalization is the division of a nation into states or provinces. 1951 Refugee Convention The 1951 Convention relating to the Status of Refugees is the key legal document in defining who is a refugee, their rights and the legal obligations of states. UN Declaration of Human Rights (1948) The Universal Declaration of Human Rights is an international document that states Asia rights and f undamental freedoms to which all human beings are entitled.Negative Rights and Positive Rights Positive Rights are rights that can only be enjoyed through positive intervention on the part of government, often linked to the idea of freedom to', whilst negative rights are rights that are enjoyed by virtue of the inactivity of others, particularly government, and are often seen as freedoms from'. Resurrections The application of values and theories drawn from European culture, to other groups or peoples, implying a biased or distorted viewpoint.

Walt Whitman and the Civil War

The poet Walt Whitman wrote about the Civil War extensively.  His heartfelt observation of life in wartime Washington made its way into poems, and he also wrote articles for newspapers and a number of notebook entries only published decades later. He had worked for years as a journalist, yet Whitman did not cover  the conflict as a regular newspaper correspondent. His role as an eyewitness to the conflict was unplanned. When a newspaper casualty list indicated that his brother serving in a New York regiment had been wounded in late 1862, Whitman traveled to Virginia to find him. Whitmans brother George had only been slightly wounded. But the experience of seeing army hospitals made a deep impression, and Whitman felt compelled to move from Brooklyn to Washington to become involved with the Union war effort as a hospital volunteer. After securing a job as a government clerk, Whitman spent his off-duty hours visiting hospital wards filled with soldiers, comforting the wounded and the sick. In Washington, Whitman was also perfectly positioned to observe the workings of the government, movements of troops, and the daily comings and goings of a man he greatly admired, President Abraham Lincoln. At times Whitman would contribute articles to newspapers, such as a detailed report of the scene at Lincoln’s second inaugural address. But Whitman’s experience as a witness to the war was mostly important as an inspiration for poetry. A collection of poems titled Drum Taps, was published after the war as a book. The poems contained in it ultimately appeared as an appendix to later editions of Whitmans masterpiece, Leaves of Grass. Family Ties to the War During the 1840s and 1850s, Whitman had been following politics in America closely. Working as a journalist in New York City, he no doubt followed the national debate over the greatest issue of the time, slavery. Whitman became a supporter of Lincoln during the 1860 presidential campaign. He also saw Lincoln speak from a hotel window in early 1861, when the president-elect passed through New York City on the way to his first inauguration. When Fort Sumter was attacked in April 1861 Whitman was outraged. In 1861, when Lincoln called for volunteers to defend the Union, Whitman’s brother George enlisted in the 51st New York Volunteer Infantry. He would serve for the entire war, eventually earning an officer’s rank, and would fight at Antietam, Fredericksburg, and other battles. Following the slaughter at Fredericksburg, Walt Whitman was reading casualty reports in the New York Tribune and saw what he believed to be a misspelled rendering of his brother’s name. Fearing that George had been wounded, Whitman traveled southward to Washington. Unable to find his brother at military hospitals where he inquired, he traveled to the front in Virginia, where he discovered that George had only been very slightly wounded. While at Falmouth, Virginia, Walt Whitman saw a horrifying sight beside a field hospital, a pile of amputated limbs. He came to empathize with the intense suffering of wounded soldiers, and during two weeks in December 1862, he spent visiting his brother he resolved to begin helping in military hospitals. Work as a Civil War Nurse Wartime Washington contained a number of military hospitals which took in thousands of wounded and ill soldiers. Whitman moved to the city in early 1863, taking a job as a government clerk. He began making the rounds in hospitals, consoling the patients and distributing writing paper, newspapers, and treats such as fruits and candy. From 1863 to the spring of 1865 Whitman spent time with hundreds, if not thousands, of soldiers. He helped them write letters home. And he wrote many letters to his friends and relatives about his experiences. Whitman later said that being around the suffering soldiers had been beneficial to him, as it somehow restored his own faith in humanity. Many of the ideas in his poetry, about the nobility of common people, and the democratic ideals of America, he saw reflected in the wounded soldiers who had been farmers and factory workers. Mentions in Poetry The poetry Whitman wrote had always been inspired by the changing world around him, and so his eyewitness experience of the Civil War naturally began to infuse new poems. Before the war, he had issued three editions of Leaves of Grass. But he saw fit to issue an entirely new book of poems, which he called Drum Taps. The printing of Drum Taps began in New York City in the spring of 1865, as the war was winding down. But then the assassination  of Abraham Lincoln prompted Whitman to postpone publication so he could include material about Lincoln and his passing. In the summer of 1865, after the war’s end, he wrote two poems inspired by Lincoln’s death, â€Å"When Lilacs Last in the Dooryard Bloom’d† and â€Å"O Captain! My Captain!† Both poems were included in Drum Taps, which was published in the fall of 1865. The entirety of Drum Taps was added to later editions of Leaves of Grass.

Movie Analysis Penanggal Is A Malaysian Horror Film...

Penanggal is a Malaysian horror film about a girl, Murni, who is transferred the power of the penanggal by her grandmother moments before the grandmother is killed by the village for eating newborn babies. Murni becomes a penanggal against her will regularly and kills women and newborn babies. She also uses magic to make a man fall in love with her and spits acidic blood on his beautiful fiancà ©e when she comes to save him. In the end, the villagers kill Murni by setting her house on fire with her inside, as they did to her grandmother in the beginning. Cultural context: The film I selected was made in Malaysia and released there in 2013. According to the CIA’s World Factbook, 23.2% of Malaysia’s land is agricultural and another 62% is forest5. Only an estimated 5% of Malaysia’s cropland is actually irrigated6, meaning that the other 95% is tended by hand. 16% of Malaysians today are still employed in agriculture16. Malaysia’s culture focuses heavily on agriculture, much like the traditional Slavic culture. There are several kinds of vampire myths that can be found in Southeast Asia1 with a few being Malaysian – the penanggal, Maneden, Bajang, a polong/pelesit, and the langsuir2. In appearance, a penanggal is a floating woman s head with entrails dangling beneath. Unlike the Slavic vampires who can be men or women, penanggalan are exclusively young or old beautiful women3. The intestines dangling below her head drip a liquid that causes sores when it makes contact with