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This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.

Multiple Choice Questions

1. What three ways do we obtain from one another the greater part of those mutual good offices which we stand in need of?
(a) By labor, by charity, or by ingenuity.
(b) By treaty, by barter, or by purchase.
(c) By ingenuity, by treaty, or by purchase.
(d) By labor, by barter , or by charity.

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

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

4. What word expressed the weight or quantity of metal contained in the first coins?
(a) Denomination.
(b) Fineness.
(c) Purity.
(d) Stamp.

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

Short Answer Questions

1. When was the Bank of England incorporated?

2. What is the ultimate and real standard by which the value of all commodities can, at all times and places, be estimated and compared?

3. What limits the extent of the division of labor?

4. What happens if the supply of a commodity is greater than the demand for it?

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

Short Essay Questions

1. What two values does the workman add to manufactured materials?

2. In every society or neighborhood, how is an ordinary or average rate of rent regulated?

3. What is the difference between the real price of a commodity and the nominal price of a commodity?

4. Why was the assaying of precious metals originally a problem?

5. Using an example from the text, explain how the value of the most precious metal used for coinage regulates the value of coins made with a lesser metal.

6. How are the differences in men of different professions fostered?

7. What would happen at the end of a war, if the enemy confiscated the gold upon which the losing country's paper money was based?

8. In all countries, why are precious metals the preferred means of commerce?

9. Who commonly makes improvements in manufacturing machinery?

10. Why is the division of labor not considered the effect of human wisdom?

(see the answer keys)

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