In The Wealth of Nations, Adam Smith explains that he agrees with Thomas Hobbes

Question

In The Wealth of Nations, Adam Smith explains that he agrees with Thomas Hobbes in that wealth is the equivalent of what?(A)wealth is the equivalent of bartering.(B)wealth is the equivalent of happiness.(C) wealth is the equivalent of power.(D)wealth is the equivalent of labor]

Which answer below provides the best explanation of the following Adam Smith quotation in The Wealth of Nations?

In The Wealth of Nations, Adam Smith states that when the quantity brought to market falls short of the effectual demand, the market price rises above the natural price; but when it exceeds the effectual demand the market price falls below the natural price. This is known as what principle? (A) Smith's Principle. (B) The law of supply and demand. (C) The Krieger Principle (D) Tempus Fugit

According to Milton Friedman, the role of government is to do something that the market cannot do for itself, namely, to determine, arbitrate, and enforce the rules of the game in the market. (T/F) ?

Explanation / Answer

1. c) wealth is the equivalent to power.

Thomas Hobbes view of wealth is that it is equivalent to power. Wealth is equivalent to purchasing power of the person who possesses it and Adam Smith agrees with it in his book because wealth is of no use without using it to purchase things.

2. b) the law of supply and demand

This principlar states that when supply is same and the demand increases, the price increases. But when the suppy is same and demand falls short, the price decreases.

3. False

According to Milton Friedman, the role of government is to provide defense, enforce contract between individuals and protect its citizens. The government shouldn't get involved in matters of reaaranging economy.

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