Scottish economist Adam Smiths The Wealth of Nations heralded the mar

Question

Scottish economist Adam Smith’s  The Wealth of Nations  heralded the market based economic system that has increasingly become the norm since the book’s publication in 1776. Some say that Smith’s magnum opus was to economics as Newton’s Principia Mathematica was to physics or as Darwin’s  On the Origin of Species  was to biology. Certainly the book made its impact in the western world.

1776 predates wide usage of the term  capitalism , now commonly associated with Smith, and which Smith refers to as a “system of natural liberty.” Smith presented what we today consider Economics 101: supply and demand, and the importance of specialization and the division of labor. He also posited that individuals pursuing their own self-interest could unintentionally create a more just society by so doing—an idea sometimes referred to as the “Invisible Hand.”

Even Smith’s critics do not deny the book’s immense influence. Murray Rothbard levels the criticism that  The Wealth of Nations,  in fact, eclipsed public knowledge of all economists—better ones, he says—before Smith.    1 
 1. Which of the following statements is not in contradiction with the opinions of Murray Rothbard as expressed in the passage?

I. Smith was possibly the third best economist of all time.
II.  The Wealth of Nations  should not have been as influential as it was.
III. Adam Smith was not particularly influential.

A. I Only
B. II Only
C. III Only
D. I and II Only
E. II and III Only

2 
 2. Which of the following would be an example of the “Invisible Hand” as described by Adam Smith?

(A) A group of moviegoers who are able to get cheaper tickets for a film by buying their tickets as a group
(B) A society in which the division of labor frees certain people to pursue careers that might seem impractical in a non-capitalist society
(C) A university in which classes are first-come, first-served, thereby equitably distributing courses according to the passion and dedication of students
(D) A market in which there are more buyers than sellers, thus forcing the price of goods upwards
(E) A stock exchange in which each trader acts according to a different set of information, such that certain commodities become hyped and their prices overinflated

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mitul19 · Answer

Could you please post the official answers

cigarboy · Answer

Please help me to answer questions that mention contradicting ones opinion?

1. Which of the following statements is not in contradiction with the opinions of Murray Rothbard as expressed in the passage?

I. Smith was possibly the third best economist of all time.
II. The Wealth of Nations should not have been as influential as it was.
III. Adam Smith was not particularly influential.

A. I Only
B. II Only
C. III Only
D. I and II Only
E. II and III Only

cigarboy · Answer

2. Which of the following would be an example of the “Invisible Hand” as described by Adam Smith?

The concept of Invisible hand stated in the passage means that individual work based on self-interest but collectively it turns out good for everyone.

After going through options, only A and C turn out to be contender for the answer.

(A) A group of moviegoers who are able to get cheaper tickets for a film by buying their tickets as a group- tempting, but the individuals here are already together to reap benefits of cheap prices if something is purchased in bulk. Individuals are aware of this fact.
  (C) A university in which classes are first-come, first-served, thereby equitably distributing courses according to the passion and dedication of students - No one is aware of one another's goal and so act on self-interest.

Sajjad1994 · Answer

Official Explanation

2. Which of the following would be an example of the “Invisible Hand” as described by Adam Smith?

Difficulty Level:   700

Explanation

The  “Invisible Hand”  is described as the idea that  individuals pursuing their own self-interest could unintentionally create a more just society.

(A)  is wrong because no one is acting all that selfishly here, nor is the final result particularly just — this would be a better choice if the moviegoers’ actions somehow caused a benefit to people other than themselves.

(B)  is wrong because it has little to do with selfishness or justice, but with another aspect of Smith’s writings.

(C)  is correct because this system promotes selfishness (each student tries to sign up as quickly as possible for each class, without thinking of others), but those classes are then said to be  “equitably distributed.”

(D)  is wrong because raising prices isn’t inherently selfish, no one appears to be competing, and the end result is not particularly just.

(E)  is wrong for the same reasons as (D).

Answer: C

Sajjad1994 · Answer

Official Explanation

1. Which of the following statements is not in contradiction with the opinions of Murray Rothbard as expressed in the passage?

Difficulty Level:   700

Explanation

Statement I  is correct because Rothbard only says that there were better   than Smith. That means that at least two were better than Smith, but Smith could still have been the third best (you certainly don’t know that Rothbard actually thinks that Smith comes in third place, but the question asks for statements that simply do not contradict Rothbard’s remarks).

Statement II  is correct because Rothbard says that Smith’s book  “eclipsed public knowledge”  of better economists, meaning it had influences that it shouldn’t have.

The third statement  is not correct because of the first line of the third paragraph, Even Smith’s critics do not deny the book’s immense influence.

Answer: D

VerbalBot · Answer

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Scottish economist Adam Smiths The Wealth of Nations heralded the mar

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Scottish economist Adam Smiths The Wealth of Nations heralded the mar

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