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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 2, The Tyranny of Controls.

Multiple Choice Questions

1. Which of the following is not one of Adam Smith's duties of government?
(a) correct for third party effects
(b) administration of justice
(c) protection of members of society who are not responsible, such as children
(d) protect members from coercion

2. The economy functions on the basis of:
(a) orders
(b) voluntary cooperation
(c) command
(d) government direction

3. What is a good source of information on prices and markets?
(a) the Sunday paper
(b) word of mouth
(c) The Wall Street Journal
(d) a weekly magazine

4. Adam Smith wrote:
(a) The Price System
(b) The Wealth of Nations
(c) Das Kapital
(d) Economic Made Simple

5. A change in prices affects all but the following:
(a) incentrive to act on information
(b) wages
(c) nothing
(d) procedures income

Short Answer Questions

1. The command elements of every economy include things like:

2. Government interferes with the price system by:

3. The higher price of pencils results in all but the following:

4. A tariff implemented to raise employment in the domestic nation:

5. The term human capital refers to the:

(see the answer key)

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