Quiz questions
According to Smith, what fundamental human propensity gives occasion to the division of labour?
- A desire for political control
- A natural propensity to truck, barter, and exchange
- A drive for technological progress
- A moral duty to one’s community
Why does Smith say the division of labour is limited by the extent of the market?
- Because workers’ innate skills are limited
- Because a larger market can absorb more specialized production
- Because money supply constrains specialization
- Because natural resources are the primary constraint
What explanation does Smith give for the origin of money?
- It arose to remedy the inconveniences of barter by using commodities generally accepted in exchange
- It was created by sovereign decree as a unit of account
- It is produced by bankers to increase profits
- It is merely accumulated bullion and the main source of national wealth
Which three component parts does Smith identify as making up the price of commodities?
- Wages, profit (of stock), and rent
- Supply, demand, and taxation
- Cost of materials, transportation, and tariffs
- Government price, monopoly charge, and subsidy
What is Smith’s central critique of the mercantile system?
- That it rightly measures wealth by accumulated bullion
- That it misunderstands wealth and harms prosperity by privileging exports, restrictions, and bullion accumulation over free exchange and annual produce
- That it is too favorable to free trade and neglects domestic industry
- That colonies should be strictly regulated to maximize mother-country bullion
Active recall prompts
According to Smith, what fundamental human propensity gives occasion to the division of labour?
Why does Smith say the division of labour is limited by the extent of the market?
What explanation does Smith give for the origin of money?
Which three component parts does Smith identify as making up the price of commodities?
What is the main idea of "Book I — Chapter 1: Of the Division of Labour", and how would you explain it without looking back?
What is the main idea of "Book I — Chapter 2: Of the Principle which gives Occasion to the Division of Labour", and how would you explain it without looking back?
What is the main idea of "Book I — Chapter 3: That the Division of Labour is Limited by the Extent of the Market", and how would you explain it without looking back?
What is the main idea of "Book I — Chapter 4: Of the Origin and Use of Money", and how would you explain it without looking back?