PrepTest 138, Section 1, Question 15
David Warsh's book describes a great contradiction inherent(451 more words not shown)
Which one of the following(9 more words not shown)
- AMainstream economists have(12 more words not shown)
- BThe functioning of(15 more words not shown)
- CRecent developments in(16 more words not shown)
- DAdam Smith was(18 more words not shown)
- EEconomists have, until(15 more words not shown)
Reading the passage
We've already predicted the main point: increasing returns describe something important in real industries, yet economists long kept that idea outside the mainstream because it was difficult to model rigorously. Only relatively recently did they overcome that barrier.
What we’re looking for
The right answer may summarize this omission without repeating every reason behind it. We need the history of the neglected Pin Factory, not just one of the ideas used to introduce the problem.
Working the answers
- A
This reverses the history. For almost two centuries, mainstream theory emphasized diminishing returns, not increasing returns.
- B
Mathematical convenience helps explain the historical preference for diminishing returns. This answer instead makes acceptance of the Invisible Hand the main subject and leaves out the neglected increasing returns and their eventual acceptance.
- C
The Pin Factory became rigorous enough to gain acceptance. Nothing says it became more rigorous than the Invisible Hand. That unsupported comparison also misses the broader story of an important idea's long exclusion.
- D
This is a statement about Smith from the introduction. It doesn't capture the conflict between the models, the neglect of increasing returns, or the later change in economic thought.
- ECorrect
This identifies the important omission and qualifies it with until somewhat recently. The final paragraph describes the Pin Factory finally entering mainstream thought, so the answer captures the history we predicted.
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