Ch7 Test Questions & Answers Economics

Chapter 7 Test Bank

Multiple Choice

1. According to anthropologists, what social institution is the structured patterns and relationships through which people exchange goods and services?
2. Political systems
3. Holistic systems
4. Kinship systems
5. Economic systems
6. __________ anthropologists study the decisions people make about earning a living, what types of work people choose to do, and the creation of value.
7. Political
8. Economic
9. Biolinguistic
10. Deterministic
11. Which type of money is created and guaranteed by a government, such as the American dollar bill?
12. Fiat money
13. Commodity money
14. General purpose money
15. Sphere money
16. Which economic theory studies how people make decisions to allocate resources like time, labor, and money to maximize their personal satisfaction?
17. Neoclassical economics
18. Marxism
19. Substantivism
20. Cultural economics
21. The collection of goods in a community and the subsequent redivision of those goods among members of a society is called
22. exchange.
23. production.
24. redistribution.
25. capitalism.
26. The circulation of arm bands and necklaces as part of the Kula ring in the Trobriand islands is an example of __________ reciprocity.
27. delayed
28. negative
29. persistent
30. generalized
31. Which perspective incorporates symbols and morals into the understanding of a society’s economy?
32. Neoclassical economics
33. Substantivism
34. Marxism
35. Cultural economics
36. Economies in which people seek high social rank, prestige, and power instead of money and material wealth are known as
37. capitalist.
38. surplus value.
39. market exchange.
40. prestige economies.
41. The exchange of brass rods for the purchase of cattle or the payment of a bride price is an example of the use of
42. surplus value.
43. general-purpose money.
44. limited-purpose money.
45. exchange value.
46. Gift exchange for Marcel Mauss is based in
47. prestige.
48. profit.
49. obligation.
50. equality.
51. In Malaysia, capitalist entrepreneurship is
52. about economic action.
53. about profit accumulation.
54. usually successful.
55. respectful of Islamic and Malay obligations and values.
56. When you are consuming an object, the process of taking possession of it is called
57. gift exchange.
58. surplus value.
59. appropriation.
60. exchange value.
61. The means of production refers to
62. how people make decisions to allocate resources such as time, labor, and money in order to maximize their personal satisfaction.
63. the collection of goods in a community and the subsequent redivision of those goods among members of a society.
64. production organized by families.
65. the machines and infrastructure that create goods in society.
66. Reciprocity
67. is giving something without the expectation of return, at least not in the near term.
68. is the give-and-take that builds and confirms relationships.
69. occurs when a person gives something, expecting the receiver to return an equivalent gift or favor at some point in the future.
70. is the attempt to get something for nothing, to haggle one's way into a favorable personal outcome.
71. The main difference between economists and economic anthropologists is that economists
72. try to understand and predict economic patterns.
73. do not assume economic transactions are the same everywhere.
74. tend to look at the day-to-day economic decisions of people.
75. find macrolevel economic transactions irrelevant.
76. Which of the following words is most closely linked to the Marxist perspective?
77. Inequality
78. Equality
79. Rationality
80. Relativism
81. Why is Karl Polanyi’s distinction between formal and substantive economics important?
82. It explains why states control economies in Europe.
83. It distinguishes between primitive and capitalist economic systems.
84. It recognizes that economies involve both how people think and the actual transactions they engage in.
85. It laid the groundwork for the rise of Marxist theory in anthropology.
86. The themes of reciprocity and gift exchange are critical to anthropologists because
87. they are economically insignificant in market-based economies.
88. the exchange of gifts is present in all societies.
89. reciprocity is rarely embedded in social relations.
90. they are only found in pristine, untouched societies.
91. A good illustration of the Marxist concept of surplus value is
92. a worker shows up to work late and gets his pay reduced, generating more profit for the owner.
93. a worker makes one $30 sweater every hour in a factory but gets paid only $15.
94. a worker improves her or his efficiency by not taking bathroom breaks.
95. a factory owner prevents labor unions from forming in the factory.
96. From an anthropological point of view, people remove the price tag from gifts and wrap birthday presents because
97. people like surprises.
98. people are anxious about being seen as spending too much on gifts.
99. the paper industry has convinced people it is necessary.
100. people are ambivalent about expressing their connections with others using impersonal goods.
101. The main reason you cannot simply go buy a bachelor’s from your institution is that
102. education is a long-term transaction steeped in morality and obligation.
103. the value of a college education is too difficult to concretize.
104. institutions of higher education are not profit-driven.
105. the debt incurred in obtaining a BA builds social cohesion.
106. When a parent pays for a child’s piano lessons, he or she is engaged in __________ reciprocity.
107. delayed
108. generalized
109. balanced
110. negative
111. __________ reciprocity is the form of reciprocity that is characterized by gifts, which are given freely without expectation of return.
112. Generalized
113. Balanced
114. Delayed
115. Free
116. Cultural economic theory argues that
117. symbols and morals are important in the understanding of a society's economy.
118. conflicting interests of two classes are one of the outcomes of capitalism.
119. the daily transactions people actually engage in to get what they need or desire are the “substance” of the economy.
120. people make decisions to allocate resources such as time, labor, and money to maximize their personal satisfaction.
121. What is the social institution in which people come together to buy and sell goods?
122. Value
123. Money
124. Currency
125. Markets
126. The cooperative organization of work into specialized tasks and roles is
127. the division of labor.
128. Marxism.
129. the domestic market.
130. inequality.
131. Cultural economists are interested in which perspective on economics?
132. emic
133. etic
134. rational
135. irrational
136. When a grandparent gives a grandchild a birthday present, they are engaging in __________ reciprocity.
137. balanced
138. generalized
139. negative
140. positive
141. The point of the Kula exchange is to
142. get what people needed to survive.
143. barter.
144. gain prestige.
145. trade farm goods for ocean goods.
146. Value is
147. the relative worth of an object.
148. the process of taking possession of an object.
149. the act of using and assigning meaning to a good, service, or relationship.
150. a mass-produced and impersonal good with no meaning or history.
151. Cultural economics operates with the view that
152. economics are ruled by practical reason.
153. noncapitalist and capitalist economies are so different that they require different theoretical approaches.
154. social inequality emerges from the conflicting interests of wealthy class and the working class.
155. morals and economic activity are intertwined with one another.
156. From an anthropological perspective, the main reason Wall Street banks are not the bastions of individualism and cold rationalism many think they are is that
157. bankers can be quite compassionate and donate money to many worthy causes.
158. personal relationships and local knowledge are critical to successful transactions.
159. the government heavily regulates the decisions bankers make.
160. certain bankers think more like Marxists than neoclassical economists.
161. Food stamps are an example of __________ money.
162. general purpose
163. limited purpose
164. commodity
165. transactional
166. Which of the following is not true of economic anthropology?
167. It is skeptical of the idea that there is a universal value for anything.
168. It challenges the notion that economic transactions are the same everywhere.
169. It assumes that free market capitalism will take over the world.
170. It encompasses multiple theoretical approaches to explain how economies work.
171. A formalist anthropologist doing fieldwork in a supermarket would be most interested in
172. the geographic location and formal spatial layout of the supermarket.
173. how shoppers decide which cat food to buy when they have fifteen varieties to choose from.
174. the ways managers appropriate the labor of checkout clerks, butchers, and other workers.
175. the diverse ways general-purpose money circulates in the store.
176. If you applied the notion of transactional orders to understand a scandal in which a college professor accepts payment for a grade, you would most likely focus on the
177. poor morality of the professor.
178. symbolic meanings Americans hold about the morality of education and student–teacher relations.
179. fact that American higher education pays its professors very little.
180. widespread corruption that runs throughout universities.
181. A substantivist perspective on the economic life of a college fraternity would likely focus on the
182. spending the fraternity does on parties.
183. informal exchange of favors and goods among members.
184. exploitation of pledges’ labor by full-fledged members.
185. prestige that accrues to members who give a lot of goods and services to other members.
186. Which of the following analyses of Christmas shopping would be least likely to come from a follower of cultural economics?
187. People buy gifts to reaffirm and strengthen social relations.
188. People buy certain gifts to build their stature among friends and family.
189. People might buy some gifts in a store and trade and barter for other gifts.
190. People always make decisions about what to buy on the basis of getting the lowest price.
191. A Marxist approach to the cultural processes Karen Ho studied of Wall Street would be most focused on
192. the tendency to lay off employees on a regular basis as the bank suffers through financial crises caused by its own activities.
193. the rational decision-making logic of bankers.
194. the value placed on individual wealth and conspicuous consumption among bankers.
195. the way government regulations moderate the worst effects of financial crises caused by the banks.
196. A substantivist would be most likely to explain the Kula cycle as
197. an elaborate exercise with little useful benefits to the society.
198. closely tied to important social institutions, such as kin networks, trading ties, and political structure.
199. an opportunity for individuals with keen negotiating skills to get a lot of goods.
200. a way of gaining personal prestige.

True/False

1. Malay entrepreneurs have long been resistant to capitalism and industrialization because they contradict their religious beliefs.
2. True
3. False
4. Economists and economic anthropologists are not that different in the way they study how people get the things they need to survive.
5. True
6. False
7. The use of money is a human universal.
8. True
9. False
10. Exchange is a human universal.
11. True
12. False
13. In the Kula exchange, the prestige lies in receiving armbands and necklaces, not in giving them.
14. True
15. False
16. Gift exchanges are important because people everywhere invest symbolic meaning in the things they give, receive, and consume.
17. True
18. False
19. Malinowski’s analysis of the Kula cycle is important because it helps explain how Trobriand men get social status.
20. True
21. False
22. With the spread of capitalism, the world’s economic systems are becoming homogenized.
23. True
24. False
25. Spheres of exchange create specific social networks where money and goods flow freely across borders.
26. True
27. False
28. The relative worth of an object or service is its cost.
    1. True
    2. False
29. The cooperative organization of work into specialized tasks and roles is the division of labor.
    1. True
    2. False
30. The market is a social institution in which people come together to buy and sell goods.
    1. True
    2. False
31. Socialism is the economic system based on private ownership of the means of production, in which prices are set and goods distributed through a market.
    1. True
    2. False
32. Formalists criticized substantivists for lack of attention to individual action and behavior and their focus on investigation into individual economic behavior and rationality.
    1. True
    2. False
33. People who live through objects and images not of their own making are spiritualists.
    1. True
    2. False

Short Answer

1. If you wanted to study consumer fashion trends in China, which theoretical approach would be most valuable? Why?
2. Is cultural economics applicable to a study of an industrial factory? Explain and illustrate your answer.
3. How might an economic anthropologist approach rebuilding pathways of exchange in a war-torn country differently from a traditional economist?
4. If you had a goal of understanding the economic life of a typical American suburban family, which theoretical approach(es) from economic anthropology would you find most valuable? Explain your answer.
5. Compare and contrast how two theories—formalism and substantivism—would explain how and why people consume prestige goods, like Ferrari automobiles and Gucci bags.
6. What role do you think cultural economics could play in a real-world application, such as an economic development program headed by anthropologist Jim Yong Kim?
7. How do culture and social relations shape the meaning of money?
8. Are there distinct cultures of capitalism?
9. How are reciprocity and gift-giving related to the economy?
10. How are economic transactions, consumption, and exchanges related to social and individual identities?

Short Answer Key

1. If you wanted to study consumer fashion trends in China, which theoretical approach would be most valuable? Why?
   1. Is Money Really the Measure of All Things?
   2. Neoclassical Economics
      1. The economy is a division of labor and the exchange of goods and services in a market.
      2. Workers cooperate in the division of labor to produce goods. The market brings together buyers and sellers to exchange those goods.
      3. Value and wealth are created by competition between buyers and sellers.
   3. Substantivism
      1. The economy is the substance of the actual transactions people engage in to get what they need and want.
      2. Economic processes are embedded in and shaped by non-market social institutions, such as the state, religious beliefs, and kinship relations.
      3. Value is relative, created by particular cultures and social institutions.
   4. Marxism
      1. Capitalism, which is a type of economic system, is a system in which private ownership of the means of production and a division of labor produce wealth for a few, and inequality for the masses.
      2. People participate in capitalism by selling their labor. That labor is appropriated by those holding the means of production.
      3. Labor (especially the exploitation of others’ labor) is a major source of value.
   5. Cultural Economics
      1. The economy is a category of culture, not a special arena governed by universal economic rationality.
      2. Economic acts are guided by local beliefs and cultural models, which are closely tied to a community’s values.
      3. Value is created by the symbolic associations people make between an activity, good, or service and a community’s moral norms.
2. Is cultural economics applicable to a study of an industrial factory? Explain and illustrate your answer.
   1. Is Money Really the Measure of All Things?
   2. Cultural Economics
      1. The economy is a category of culture, not a special arena governed by universal economic rationality.
      2. Economic acts are guided by local beliefs and cultural models, which are closely tied to a community’s values.
      3. Value is created by the symbolic associations people make between an activity, good, or service and a community’s moral norms.
3. How might an economic anthropologist approach rebuilding pathways of exchange in a war-torn country differently from a traditional economist?
   1. Is Money Really the Measure of All Things?
   2. If money is not the measure of all things, where exactly within the processes of culture does value—the relative worth of an object or service—come from? Economic anthropology, the subdiscipline concerned with how people make, share, and buy things and services, has long considered this question. Economic anthropologists study the decisions people make about earning a living, what they do when they work, the social institutions that affect these activities, and how these three matters relate to the creation of value (M. E. Smith 2000; Wilk and Cliggett 2007).
   3. Although both anthropologists and economists study the origins of value and how economies work, they generally have different goals. Economists typically try to understand and predict economic patterns, often with a practical goal of helping people hold on to and increase their wealth. Economists study communities in terms of economic statistics, and they assume that economic transactions in one community or country are like transactions in any other.
4. If you had a goal of understanding the economic life of a typical American suburban family, which theoretical approach(es) from economic anthropology would you find most valuable? Explain your answer.
   1. Is Money Really the Measure of All Things?
   2. Neoclassical Economics
      1. The economy is a division of labor and the exchange of goods and services in a market.
      2. Workers cooperate in the division of labor to produce goods. The market brings together buyers and sellers to exchange those goods.
      3. Value and wealth are created by competition between buyers and sellers.
   3. Substantivism
      1. The economy is the substance of the actual transactions people engage in to get what they need and want.
      2. Economic processes are embedded in and shaped by non-market social institutions, such as the state, religious beliefs, and kinship relations.
      3. Value is relative, created by particular cultures and social institutions.
   4. Marxism
      1. Capitalism, which is a type of economic system, is a system in which private ownership of the means of production and a division of labor produce wealth for a few, and inequality for the masses.
      2. People participate in capitalism by selling their labor. That labor is appropriated by those holding the means of production.
      3. Labor (especially the exploitation of others’ labor) is a major source of value.
   5. Cultural Economics
      1. The economy is a category of culture, not a special arena governed by universal economic rationality.
      2. Economic acts are guided by local beliefs and cultural models, which are closely tied to a community’s values.
      3. Value is created by the symbolic associations people make between an activity, good, or service and a community’s moral norms.
5. Compare and contrast how two theories—formalism and substantivism—would explain how and why people consume prestige goods, like Ferrari automobiles and Gucci bags.
   1. Is Money Really the Measure of All Things?
   2. Polanyi’s own approach to economics was substantivist. Its primary goal was to describe how the production and redistribution of goods (collection of goods in a community and then redivision of those goods among members) were embedded in and shaped by non-market social institutions, such as the state, religious beliefs, and kinship relations. Substantivism held that societies have unique social institutions and processes that influence economics like other aspects of culture. From this perspective, the value of goods in an economic system is culturally relative, rooted in particular cultures and social institutions (Wilk and Cliggett 2007).
   3. By the 1960s, some anthropologists began to criticize substantivism’s lack of attention to individual action and behavior, shifting their focus to formal economics. To formalists, people everywhere confront limited means and unlimited ends (wants), and therefore they make rational decisions that are appropriate to the satisfaction they desire (M. E. Smith 2000). Being anthropologists, the formalists understood that “satisfaction” could be culturally defined and variable but, they asserted, the decision-making processes people used to achieve satisfaction were basically the same everywhere (Wilk and Cliggett 2007).
6. What role do you think cultural economics could play in a real-world application, such as an economic development program headed by anthropologist Jim Yong Kim?
   1. Is Money Really the Measure of All Things?
   2. Cultural Economics
      1. The economy is a category of culture, not a special arena governed by universal economic rationality.
      2. Economic acts are guided by local beliefs and cultural models, which are closely tied to a community’s values.
      3. Value is created by the symbolic associations people make between an activity, good, or service and a community’s moral norms.
7. How do culture and social relations shape the meaning of money?
   1. Is Money Really the Measure of All Things?
   2. Although both anthropologists and economists study the origins of value and how economies work, they generally have different goals. Economists typically try to understand and predict economic patterns, often with a practical goal of helping people hold on to and increase their wealth. Economists study communities in terms of economic statistics, and they assume that economic transactions in one community or country are like transactions in any other.
   3. Anthropologists, on the other hand, do not assume that transactions are the same everywhere, as they recognize that culture shapes the character of any transaction. Furthermore, we tend to study how people lead their day-to-day economic lives by means of direct, long-term interaction with them. As a result, we tend to focus more than economists do on understanding the world’s diversity of economic systems, the structured patterns and relationships through which people exchange goods and services, and making sense of how these systems reflect and shape particular ways of life.
8. Are there distinct cultures of capitalism?
   1. Does Capitalism Have Distinct Cultures?
   2. In spite of theoretical orientation, however, anthropologists view capitalism as a cultural phenomenon. In fact, its deepest assumptions are cultural: capitalism assumes certain values and ideals to be natural, in the sense that this is the way things really are. It seems inevitable that well-being can be achieved through consuming material things. But anthropologists also recognize that the cultural contexts and meanings of capitalist activities take diverse forms. Let us compare two examples—one drawn from Wall Street, the other from Malaysia—to illustrate how capitalist activities and meanings can vary across cultures.
9. How are reciprocity and gift-giving related to the economy?
   1. Why Is Gift Exchange Such an Important Part of All Societies?
   2. It may sound strange to think of a gift exchange in economic terms. We tend to think of gifts as personal expressions of reciprocity, the give-and-take that builds and confirms relationships. For Americans the problem is that we distinguish the economy from gift-giving, while in the non-industrial societies anthropologists have traditionally studied, exchanging gifts is at the heart of the local economy. So how are gifts related to economy? Two classic approaches to this question date back to the 1920s.
10. How are economic transactions, consumption, and exchanges related to social and individual identities?
    1. What Is the Point of Owning Things?
    2. So why do people come to want certain things in the first place? Sometimes it has to do with securing access to a critical resource, but often it also has to do with what a community considers “cool”—that is, impressive or trendy. But objects are not naturally “cool.” Whatever symbolic distinctions or qualities they have are culturally constructed through the process of consumption, defined as the act of using and assigning meaning to a good, service, or relationship (see also Chapter 14). Through consumption people make cultural meaning, build social relationships, and create identities (Douglas and Isherwood 1978; Appadurai 1986). Every culture distinguishes between what is appropriate and what is inappropriate to consume, providing social avenues to consuming culturally accepted goods and limiting consumption of things considered inappropriate.