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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. The laborer is rich or poor, is well or ill rewarded, in proportion to what?
(a) The nominal price of his labor.
(b) The real price of his labor.
(c) The nominal price of his purchases.
(d) The real price of his purchases.

2. What happens when the demand of a commodity is larger than the supply?
(a) The commodity is sold out.
(b) The price rises.
(c) The price falls.
(d) More goods are brought in.

3. What kind of rent is paid by a farmer?
(a) Net rent.
(b) Gross rent.
(c) Consumption rent.
(d) Production rent.

4. What is another name for paper money?
(a) Promissory notes.
(b) Commerce notes.
(c) Circulating notes.
(d) Debtors' notes.

5. What is the common instrument of commerce and exchanges in Abyssinia?
(a) Shells.
(b) Salt.
(c) Tobacco.
(d) Sugar.

6. Why are new machines more likely to be invented under division of labor?
(a) New machines are required when labor has been divided.
(b) Men have more time to experiment with various options and potential improvements.
(c) Division of labor promotes speculation and new ideas to be tried.
(d) Men are more likely to discover more efficient methods of production when their entire focus is directed towards a single step of the process.

7. When was the Bank of England incorporated?
(a) The 27th of July, 1695.
(b) The 27th of July, 1693.
(c) The 27th of July, 1694.
(d) The 27th of July, 1696.

8. What is the nominal price of a commodity?
(a) The price asked for it.
(b) The labor it took to produce it.
(c) The net profit for the seller.
(d) The price of its raw materials.

9. What commodity would a butcher be unlikely to exchange for?
(a) Bread.
(b) Wine.
(c) Cloth.
(d) Meat.

10. How are a philosopher and a street porter the same?
(a) Their first six years of life would have been very similar.
(b) Their family life would be very similar.
(c) Their desire and motivations would be very similar.
(d) Their goals for life would be very similar.

11. What is the state of the greater part of the laboring poor in all countries?
(a) Their revenue is derived from their labor only.
(b) Their labor is sporadic and not continual.
(c) Their labor is not enough for sustenance.
(d) Their revenue is not enough for sustenance.

12. In every occupation, what is the general proportion between circulating and fixed capital?
(a) There is always more fixed capital.
(b) There is always more circulating capital.
(c) They are varyingly very different.
(d) They are always equal.

13. What is the common instrument of commerce and exchanges in some parts of the coast of India?
(a) Sugar.
(b) Shells.
(c) Salt.
(d) Tobacco.

14. Which is not a reason for the increase of the quantity of work under division of labor?
(a) The invention of machines which enable one man to do the work of many.
(b) Time efficiencies.
(c) The employment of more workmen.
(d) The increase of the workmen's dexterity.

15. What is the ultimate and real standard by which the value of all commodities can, at all times and places, be estimated and compared?
(a) Production.
(b) Labor.
(c) Gold.
(d) Silver.

Short Answer Questions

1. What kind of capital is employed in the improvement of land and in the purchase of useful machines and instruments of trade?

2. What is one consequence for society where the division of labor is practiced?

3. What becomes the common instrument of commerce when barter ceases?

4. What is the common instrument of commerce and exchanges in Virginia?

5. Labor measures the value of price which resolves itself into labor, rent, and what one other thing?

(see the answer keys)

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