Economics unit 2 review

What economic system did this book describe?

Capitalism

What is it called when we weigh the positives and negatives to help us make a sound economic decision?

Cost-benefit analysis

What were some of his important ideas described in his book?

Division of labor, specialization, use of technology, self interest, competition, limited government

Did Adam smith believe it was better for an economy to work for the society or to work for yourself?

For yourself

The next best thing one gives up when making a choice

Opportunity cost

The curve that tells us the maximum output of 2 products

Production possibilities frontier

What famous economics book did Adam smith write?

The Wealth of Nations

What did smith say man's sixth sense was?

The desire for material things or utility

Describe his invisible hand theory

We are always guided to make decisions that are best for ourselves

Giving up a little of one thing in order to get more of something else.

trade-off

Who is the father of economics?

Adam Smith