Question

True or false and WHY? The theory economic development/wealth of the Mercantilists is superior to that of Cantillon or Smith.

True or false and WHY? Adam Smith's value theory is useful in resolving the paradox of value.

True or false and WHY? What Adam Smith detested about mercantilism was its focus on the founding and defense of the nation state.

True or false and WHY? Adam Smith, between the 1759 publication of The Theory of Moral Sentiments and the 1776 publication of An Inquiry Into the Nature and Causes of the Wealth of Nations, changed his mind about how the commercial world works.

The following statement by the chairman of General Motors:   “What’s good for GM is good for the economy.” is sometimes cited as an example of Smith’s reasoning of the invisible hand. True or false and WHY?

Ricardo was opposed to the tariff on grain & Malthus was not. Malthus admitted it raised the price of bread but claimed the poor were better off when the price was high than when it was low. Discuss. Explain.

Under what circumstances, according to Adam Smith, might the market price of some good remain permanently above its natural price?

Illustrate the critical concepts that underpin Thomas Malthus’s theory of population.

What is the medieval concept of just price?

What are the contributions of John Locke to the moral legitimization of capitalism?

What does Adam Smith mean by wealth? Why is this so significant?

Review Smith’s argument for international free trade. How did Ricardo improve on Smith’s theory in this regard?

Review Malthus’ theory of population and the social control of its growth. Discuss the naturalistic and cultural elements of his theory.

Review and assess Ricardo’s theory of economic progress, including the tendency toward the stationary state.

Examine the role of the population doctrine in classical economic theory.

Answer 1

Adam Smith's value theory is useful in resolving the paradox of value. (False)

Because Adam smith explained the difference in valuation of goods on the basis of relative scarcity.

Adam smith referred wealth as "the annual produce of the land and labour of the society". This "produce" is, at its simplest, that which satisfies human needs and wants of utility. In other words he considered wealth to those goods which satisfy human wants. But all goods which satisfy human wants are not wealth, such as air & sunlight which are essential for us. But they are not regarded as wealth. He considers only those goods which are relatively scarce and have money value as wealth.

Adam smith was of the view that economics was concerned with the problems arising from wealth-getting and wealth-using activities of people. Adam smith thought that that wealth is the only important factor in human society. It can fulfill all the desires of human being in society. He also assumed that the entire efforts of human society is found to be directed towards earning more and more wealth. He was of the view that wages earned by active human resources is to be the only one and most important source of income of a nation.