Adam Smith and Economic Influence

Why might some historians consider Adam Smith one of the most influential people in history?

• He taught that all people should be economic equals.

• He introduced a way of thinking about economic ideas.

• He argued for a larger role for the government in the economy.

• He wrote the economic argument for American independence.

Which of these terms is most closely related to tradeoffs?

• incentives

• margin

• markets

• scarcity

Economists assume people choose something when its expected costs are less than its

• working life.

• chief competitors.

• anticipated benefits.

• required maintenance.

Which statement is the best example of thinking at the margin?

• John has six shirts and is trying to decide whether to buy a seventh.

• Mary observes that the average cost of shoes is higher than last year.

• David decides to volunteer this summer instead of working for pay.

• Jane wants to buy a car but decides she cannot afford the insurance.

The exchange of one benefit or advantage for another that is thought to be better

• Tradeoff

• Scarcity

• Benefit

• Margin

The idea that people benefit by focusing on what they do well and then trading with others

• Trade makes people better off

• Markets coordinate trade

• Cost vs. benefit

• Scarcity forces tradeoffs

Adam Smith's metaphor to explain how an individual's pursuit of economic self-interest can produce what is societally necessary

• A) Invisible Hand

• B) Thinking at the Margin

• C) Riches of Many

• D) Economic Enigma

Which of the following is a major reason the standard of living in Japan is much higher than in Nigeria?

• greater human capital

• richer natural resources

• more foreign residents

• fewer temporary shortages

What is the best title for the list below?

• Capitalist

• Entrepreneur

• Investor

• Laborer

When Amy returns an amazing library book without finishing it so she won’t have to pay a late fee, what is her opportunity cost?

• paying the fee

• paying for something else

• finishing the book

• reading a different book