Grandfather of Economics: Industrial Revolution

The video explores the impact of the Industrial Revolution on wealth perception, highlighting Adam Smith's insights into manufacturing and farming. It discusses the factors of production—land, labor, and capital—and Smith's revolutionary theory of capital. The transition from agrarian to industrial economies is examined, with a comparative analysis of China and the UK, illustrating how nations evolve economically by leveraging industry over agriculture.

What was the revolutionary idea about wealth generation during the Industrial Revolution?

• Wealth was solely dependent on territorial expansion.

• Wealth could only be increased by invading neighbors.

• Wealth could only be generated through farming.

• Manufacturing was similar to farming in generating wealth.

Which of the following is NOT considered a factor of production according to Adam Smith?

• Land

• Labor

• Capital

• Transportation

How did Adam Smith define 'capital' in economics?

• Only physical tools and machinery

• Only land and labor

• Any material or immaterial thing that contributes value

• Only cash and currency

According to Adam Smith, why did the Americas lag in industrial development?

• Lack of capital investment

• Insufficient labor force

• Abundance of arable land

• Lack of technological knowledge

What was the primary reason for England's shift to industrialization?

• Large population

• Abundant natural resources

• Lack of arable land

• Advanced technology

Why did China not have an incentive to build factories during the 1700s?

• Lack of labor force

• Political instability

• Sufficient farmland to support its population

• Lack of technological advancement

What is the typical progression of economies according to Adam Smith's theory?

• Industry to agriculture to services

• Agriculture to industry to services

• Services to industry to agriculture

• Industry to services to agriculture