The Use of Knowledge in Society

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An exercise to develop your understanding of F.A. Hayek's 'Use of Knowledge in Society'

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In what form does knowledge exist, according to Hayek?

2 points

Concentrated

Integrated

Dispersed

Incomplete

Clear selection

What type of economic system is the objective, according to Hayek?

2 points

Rational

Just

Fair

Efficient

Clear selection

What is Hayek's view on planning?

1 point

We should rely on markets instead of planning

We should rely on market planning rather than central planning

Clear selection

What are the two types of knowledge that Hayek contrasts?

2 points

Personal knowledge

Scientific knowledge

Knowledge of time and place

Historic knowledge

Why can't we just rely on technical knowledge?

2 points

Science goes through fads and fashions

Economic conditions are constantly changing

Governments have bad incentives

Others types of knowledge are far more important

Clear selection

What is the best way, according to Hayek, to make use of fragmented knowledge?

1 point

Centralisation

Decentralisation

Clear selection

If the price of tin rises what should you do?

1 point

Use more tin

Use less tin

Clear selection

Do you need to know why the price of tin has risen in order to do this?

1 point

Yes

Clear selection

Which 2 processes are important to ensure that there is one price for any commodity?

2 points

Regulation

Competition

Arbitrage

Expertise

Why, according to Hayek, is there a lack of appreciation for the price system?

2 points

It wasn't designed

It isn't used often

It is not relevent for daily decisions

People often aren't aware that they're even using it

Clear selection

Why does Hayek mention Trotsky, Lange and Lerner?

2 points

To point out that even the political left recognise the importance of markets

To point out that the validity of economic claims rests on political values

Clear selection

Which of the following statements does the reading support?

2 points

Civilization permits markets

Markets permits civilization

Clear selection

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