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

2. In what country is the Ganges River?
(a) Bengal.
(b) India.
(c) Italy.
(d) Egypt.

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

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

5. 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 business propostion.
(b) A fair trade.
(c) A bargain.
(d) A mutual offer.

Short Answer 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?

2. What was the original price, the first purchase cost, for all things?

3. What year was the Bank of England allowed to enlarge its capital stock?

4. What does the division of labor do for individual workmen?

5. When was the Bank of England incorporated?

Short Essay Questions

1. Give one example of how a tribe of hunters or shepherds would begin the process of division of labor?

2. Who or what is involved in the manufacture and sale of a woolen coat?

3. Why do commercial nations use coins of different kinds of metals?

4. Why is it difficult to determine the exchange value between two different kinds of labor?

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

6. How do fixed capital and circulating money resemble each other?

7. Circulating capital which affords a revenue is composed of four parts. What are those four parts?

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

9. Why are circulating and fixed capital different for different occupations?

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

(see the answer keys)

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