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

Multiple Choice Questions

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

2. What is the actual price at which any commodity is commonly sold called?
(a) The derived price.
(b) The market price.
(c) The prime price.
(d) The asking price.

3. What are the three original sources of all revenue?
(a) Commerce, taxes, and trade.
(b) Trade, taxes, and wages.
(c) Profit, taxes, and commerce.
(d) Wages, profit, and rent.

4. The ordinary or average rates of wages, profit, and rent may also be called what?
(a) The derived rates.
(b) The commodity rates.
(c) The common rates.
(d) The natural rates.

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

6. Under division of labor, what generally supplies a man's wants?
(a) The produce of society's labor.
(b) The produce of other men's labor.
(c) The produce of the country's labor.
(d) The produce of a man's own labor.

7. What can be said for division of labor for all kinds of manufacturing?
(a) Division of labor does not affect the quantity of products manufactured.
(b) Many individuals and processes come together to complete a product.
(c) The quality of products manufactured are improved greatly.
(d) Machines replace many workmen who are moved to other jobs.

8. How many general types of fixed capital are there?
(a) Three.
(b) Five.
(c) Two.
(d) Four.

9. How did the idea of division of labor come about?
(a) It was an accident which resulted in positive change.
(b) It was a consequence of the applied study of manufacturing.
(c) It was an experiment which owners found to be advantageous.
(d) It was the propensity of human nature to truck, barter, and exchange one thing for another.

10. What is one characteristic of the Mediterranean Sea which made it favorable for infant navigation?
(a) No islands.
(b) Shallow water.
(c) Many harbors.
(d) No tides.

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

12. What is the real measure of the exchangeable value of all commodities?
(a) Barter.
(b) Exchange of goods.
(c) Gold.
(d) Labor.

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

14. According to the text, what does this saying describe: "Give me that which I want, and you shall have this which you want"?
(a) A bargain.
(b) A business propostion.
(c) A fair trade.
(d) A mutual offer.

15. What kind of revenue is made from the interest on money?
(a) Derivative revenue.
(b) Laborless revenue.
(c) Taxable revenue.
(d) Renewable revenue.

Short Answer Questions

1. In all countries, what do men prefer in exchange for commodities?

2. What kind of commodity must be sold quickly?

3. Originally, what did sailors fear?

4. What is the intention of the fixed capital?

5. Which occupation requires a great town?

(see the answer keys)

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