Basic Economics

Economics is:

• the branch of knowledge concerning wealth and how it is produced, consumed and distributed.

• the branch of knowledge concerning politics and how political power is produced, consumed and distributed.

• the branch of knowledge concerning sovereignty and how it is produced, consumed and distributed.

Adam Smith is known as the

• Father of Wealth

• Father of Politics

• Father of Economics

Adam Smith is known for his book:

• The Wealth of States

• The Wealth of Nations

• The Wealth of Government

Mercantilism was a system in which a nation's government, through ____ and ____ controlled most aspects of the economy.

• incentives, consumer sovereignty

• regulations, taxes

The book that Adam SMith published in 1776 argued that the type of economic system that would benefit a society and nation most was a:

• command system

• free market system

• mercantile system

• none of the above

Adam Smith believed the nation's economy would be successful if it had

• lots of government involvement

• many regulations and taxes

• no or limited government interference

• none of the above

Adam Smith believed that the key reason why a free market system would be successful for a nation was because humans

• are motivated by self interest

• would always do the right thing

• are not greedy

• all of the above

In a free market system, Adam Smith believed the natural forces (invisible hand) would lead to

• higher prices and fewer choices

• fair prices for goods and more choices

• a surplus of goods

• none of the above

The belief that economics and businesses function best when there is no interference by the government is called

• mercantilism

• command system

• laissez faire

• none of the above

Limited or lack of supply / resources is called

• poverty

• scarcity

• surplus

• none of the above