Question

directions circle the letter of the answer that correctly completes each sentence. 1. adam smith is important because _. a he wrote a book about communism b his ideas form the basis of modern economics c he was interested in becoming rich and famous d he thought governments should make decisions for businesses 2. smith believed that _ was like a contest to sell products and services. a communism b economics c competition d profit 3. smith believed that competition, like a(n) _, pushed people to do their best. a resource b ancestor c free market d invisible hand 4. according to adam smith, _ should not get in the way of competition. a governments b businesses c societies d individuals 5. a(n) _ is a place where people come together to buy and sell. a market b competition c profit d incentive 6. _ is another term for capitalism. a closed market b incentive c socialism d market economy 7. in capitalism, producers use their resources to make what the _ want most. a governments b consumers c business owners d city leaders 8. a(n) _ is something that makes a person take action. a invisible hand b profit c incentive d capitalism 9. _ is a common incentive in a capitalist economy. a popularity b profit c work d production 10. people often work harder in a _ system. a socialist b communist c command d capitalist

Explanation:

1. Adam Smith's The Wealth of Nations laid the ground - work for modern economics.
2. Smith saw competition as the contest to sell products and services.
3. He believed the "invisible hand" of competition drove people to perform well.
4. Smith advocated for limited government intervention in competition.
5. A market is a place for buying and selling.
6. Capitalism is often referred to as a market economy.
7. In capitalism, producers aim to meet consumers' demands.
8. An incentive motivates people to take action.
9. Profit is a major incentive in a capitalist economy.
10. The profit - seeking nature of capitalism can drive people to work harder.

Answer:

1. B. his ideas form the basis of modern economics
2. C. competition
3. D. invisible hand
4. A. governments
5. A. market
6. D. Market economy
7. B. consumers
8. C. incentive
9. B. Profit
10. D. capitalist