Question

1. What are the main differences between mainstream economics and political economy? Explain briefly in your own words. (10 points) 2. Reflect carefully on your own shopping behavior. Do you usually make rational, calculated, fully- informed purchases, as described by mainstream economics, or do you tend to buy on impulse for a variety of reasons, or do you do both? To what extent is your spending behavior adequately captured by mainstream economics, and to what extent does political economy provide a better analysis of your spending behavior? (10 points) 3. Many people think that soda consumption leads to increased obesity. Many schools have banned the sale of soda in vending machines. Use the concept of opportunity cost to explain why some people think these bans will succeed in reducing soda consumption. Do you agree? Explain your answer. (10 points)

Answer 1

1) Mainstream economics usually refers to the narrow study of the economy without considering other political and social considerations while political economy represents a distinct and competing approach. Political economy refer to very different things.