Capitalism and Socialism/Communism

Laissez-faire capitalism as attributed to Adam Smith called for

• heavy taxation of manufacturers

• strict government control of the economy

• minimal government involvement in the economy

• government investments in major industries

What is a key principle of a market economy (capitalism)?

• The means of production are controlled by the state.

• Supply and demand determine production and price.

• Employment opportunities are determined by social class.

• Businesses are owned by the people collectively.

During the 1800s, the writings of Karl Marx focused attention on the problems faced by

• factory owners

• investment bankers

• farm laborers

• factory workers

Karl Marx and Friedrich Engels encouraged workers to improve their lives by

• electing union representatives

• participating in local government

• overthrowing the capitalist system

• demanding pensions and disability insurance

Laissez-faire most closely translates to mean...

• natural rights

• iron law of wages

• let it happen

• tabula rasa

Who developed laissez-faire economics as a en economic philosophy? 

• Adam Smith
• Karl Marx
• John Locke
• Louis XVI

Smith believed that the economy operated according to three natural laws involving this concept...

• self-interest
• compassion
• citizenship
• trustworthiness 

Generally speaking, the lower the price, the greater the quantity demand.

• True
• False

In a market economy, who decides on the prices of goods and services?

• government
• buyers and sellers
• firms
• local leaders

Who wrote Wealth of Nations and supported Laissez-Faire economics?

• Adam Smith
• David Ricardo
• Thomas Malthus
• John Wesley