SOLVED

21) “An Inquiry into the Nature and Causes of the Wealth of Nations” published in 1776 was written by A) John Maynard Keynes. B) Karl Marx. C) Alfred Marshall. D) Adam Smith. 22) Refer to Figure 2-11. Which two arrows in the diagram depict the following transaction: LaDonna sells 20 pairs of sunglasses at the Oakley store. A) J and M B) J and G C) K and M D) K and G 23) Refer to Figure 2-11. Which two arrows in the diagram depict the following transaction: Dorian Gray hires “Wild Oscar”, a professional portrait artist, to paint his picture. A) J and M B) K and G C) K and M D) J and G 24) Refer to Figure 2-11. Which two arrows in the diagram depict the following transaction: Barney earns $250 for selling scissors and razors to Floyd’s Barber Shop. A) J and M B) K and G C) K and M D) J and G 25) Adam Smith’s behavioral assumption about humans was that people A) typically act irrationally. B) usually act in a rational, self-interested way. C) are consistently greedy. D) typically act randomly. 26) All of the following countries come close to the free market benchmark except A) Canada. B) North Korea. C) Germany. D) Singapore. 27) Adam Smith’s invisible hand refers to A) the government’s unobtrusive role in ensuring that the economy functions efficiently. B) property ownership laws and the rule of the court system. C) the process by which individuals acting in their own self-interest bring about a market outcome that benefits society as a whole. D) the laws of nature that influence economics decisions. 28) All of the following are critical functions of the government in facilitating the operation of a market economy except A) protecting private property. B) enforcing property rights. C) ensuring an equal distribution of income to all citizens. D) enforcing contracts. 29) The term “property rights” refers to A) the physical possession of a house or any other property which the owner legally purchased. B) the ability to exercise control over one’s own resources within the confines of the law. C) the government’s right to appropriate land from wealthy land owners to redistribute to peasants. D) the right of a business not to have its assets confiscated by the government in the event that the business is accused of committing fraud. 30) The primary purpose of ________ is to encourage the expenditure of funds on research and development to create new products. A) centrally planned economies B) government-run health care C) nationalizing oil companies D) patents and copyrights