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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 price falls.
(b) The price rises.
(c) The commodity is sold out.
(d) More goods are brought in.

2. What does the division of labor do for a manufacturer?
(a) It decreases the productive powers of labor.
(b) It increases the productive powers of labor.
(c) It complicates the productive powers of labor.
(d) It simplifies the productive powers of labor.

3. What was one problem with the use of rude metals?
(a) Transporting them.
(b) Mining them.
(c) Keeping them safe.
(d) Weighing them.

4. 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.

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

Short Answer Questions

1. What are the three original sources of all revenue?

2. What was the common instrument of commerce among the ancient Spartans?

3. What causes the difference between a philosopher and a street porter?

4. What kind of rent comes to the landlord after deducting the expense of management, of repairs, and all other necessary charges?

5. What is the only universal, only accurate measure of value, only standard by which we can compare the values of different commodities at all times and at all places?

Short Essay Questions

1. What three circumstances increase the quantity of work as a consequence of the division of labor?

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

3. What are the two ways in which a capital may be employed so as to yield a revenue or profit to its employer.

4. How does the market limit the division of labor?

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

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

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

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

9. How is the circulating capital of a society different from that of an individual?

10. Who commonly makes improvements in manufacturing machinery?

(see the answer keys)

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