Econ module 2 (in order)

What year was The Wealth of Nations published?

1776

Let's pretend we live and work on a large corn plantation with 200 other workers. We will each receive an equal portion of the harvest, regardless of how long we work on growing the crops. Given what we've learned about human nature, what would most likely happen at the farm?

Because there's no reward for working hard, most workers are lazy, resulting in a very poor harvest.

Why did Adam Smith believe competition was an important part of a prosperous economy?

Competition keeps prices in check. Competition encourages businesses to use resources efficiently.

In which document did the First Continental Congress declare that American colonists had the right to "life, liberty, and property"?

Declaration of Colonial Rights

What is Adam Smith known as the father of?

Father of Economics

Which of the following are true, according to a biblical worldview? (choose all that apply)

Humans are able to control their environment, including their economic systems. Humans are fallen and inherently sinful.

Which of the following are true, according to a biblical worldview? (choose all that apply)

Humans are fallen and inherently sinful. Humans are able to control their environment, including their economic systems.

According to Adam Smith, why does division of labor improve the performance and productivity of workers? (choose all that apply)

It makes one task the sole employment of the worker's life. It reduces every worker's business to one simple task.

According to Adam Smith, why does division of labor improve the performance and productivity of workers? (choose all that apply)

It reduces every worker's business to one simple task. It makes one task the sole employment of the worker's life.

Which religious philosopher discussed economics and government in Institutes on the Christian Religion?

John Calvin

Communism and socialism are examples of _________ economic systems.

Marxist

What is the title of the first chapter in The Wealth of Nations?

Of the Division of Labour

Which nation's command economy was largely responsible for a famine that killed millions in the 1930s?

Soviet Union

What was Adam Smith's first work?

The Theory of Moral Sentiments

Which religious philosopher discussed poverty and fair prices in Summa Theologica?

Thomas Aquinas

Which of the following are the three basic economic questions? (choose all that apply)

Who will consume these goods and services? How will these goods and services be produced? What goods and services will be produced?

Which of the following are the three basic economic questions? (choose all that apply)

Who will consume these goods and services? What goods and services will be produced? How will these goods and services be produced?

Why is profit motive an important characteristic of a market economy?

Without a worthwhile reward, no one would take the risks required to develop new products.

What is a mixed economy?

a combination of a market and command economy

In the early 1990s, PepsiCo introduced a new soda called Crystal Pepsi. Sales for Crystal Pepsi were so low that within a few years PepsiCo stopped producing it. What characteristic of a market economy is illustrated in this scenario?

consumer sovereignty

The idea that the desires of consumers determine what goods and services producers create is called _____________.

consumer sovereignty

In economics, individuals who purchase goods and services are called _______.

consumers

Adam Smith argues that the greatest improvement in the productivity of labor has come about because of the effects of ________.

division of labor

Which of the following are economic theories that Adam Smith supports and argues for in The Wealth of Nations? (choose all that apply)

division of labor free trade

Mercantilism was a national economic system based on maximizing ___________ and minimizing __________.

exports imports

Mercantilism was a national economic system based on maximizing exports and minimizing imports .

exports imports

In a command economy, who is primarily responsible for deciding how goods and services will be produced?

government

Adam Smith argued that if people were allowed to act in their own self-interest, the marketplace would be directed by an "invisible _____."

hand

Adam Smith believed government should take a mostly laissez-faire, or ________ approach to managing the economy.

hands-off

In economics, the term demand refers to what?

how much of a product people want

Marxist economic systems rely on the flawed view of humanity that ___________________.

humans are generally good, but they are made evil by society's bad influence

The sum total of all the buyers and sellers in a specific area is known as a(n) _______.

market

When one organization has complete control over one industry, they are said to have a ________.

monopoly

According to Adam Smith, division of labor helps workers improve their _______ more quickly.

performance

In the first chapter of The Wealth of Nations, what type of factory did Adam Smith use as an example of division of labor?

pin factory

Which of the following are characteristics of a market economy? (choose all that apply)

private ownership competition

In economics, people who create goods and services are known as _______.

producers

Which of the following functions does a government perform in a market economy? (choose all that apply)

protects consumers and workers ensures healthy competition safeguards personal property rights

In a market economy _______________________.

resources are controlled by the people

In a command economy ________________________.

resources are owned and controlled by the government

In a traditional economy _______________________.

resources are used the way they've always been used

Choose the best answer to fill in the blank: When we begin with the understanding of what God says about human nature, we can build government and economic systems that allow humans to reach their full potential, while at the same time limiting the effects that their _______ nature will have on their actions.

sinful

What is the process of concentrating on one specific task and becoming skilled in that area?

specialization

A government incentive or tax break designed to assist a specific industry is known as a _______.

subsidy

The two market forces that determine prices in a market economy are demand and _______.

supply

In The Wealth of Nations, Adam Smith argues that division of labor reduces _______________.

the amount of time lost by switching from one task to another

According to Adam Smith, a notable advantage of division of labor is that it facilitates _____________.

the invention of new machinery

What was the principal purpose of The Wealth of Nations?

to explain why some nations possessed great wealth and others did not

If a new technology was created to help farmers grow more crops, which of the following economic systems would be LEAST likely to use it?

traditional economy

Not all negative events in market economies are caused on purpose by greedy companies trying to get away with something. Pollution and other environmental damage are often the result of _________ consequences.

unintended