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This quiz consists of 5 multiple choice and 5 short answer questions through Book 2, Chapter 1.

Multiple Choice Questions

1. What reduced the value of gold and silver in Europe in the 16th century?
(a) The depletion of mines in Europe.
(b) The discovery of mines in America.
(c) The discovery of mines in Peru.
(d) The depletion of mines in America.

2. What is the sole end and purpose both of the fixed and circulating capitals?
(a) To maintain and augment the stock which may be reserved for immediate consumption.
(b) To maintain and augment the stock which may be traded for needed goods.
(c) To maintain and augment the stock which may be sold for profit.
(d) To maintain and augment the stock which may be used to expand the business.

3. Why are new machines more likely to be invented under division of labor?
(a) Men have more time to experiment with various options and potential improvements.
(b) Division of labor promotes speculation and new ideas to be tried.
(c) Men are more likely to discover more efficient methods of production when their entire focus is directed towards a single step of the process.
(d) New machines are required when labor has been divided.

4. How does division of labor affect the time required for the manufacturing process?
(a) It reduces the time for a product to be completed.
(b) It reduces the time between a workman's different tasks.
(c) It lengthens the overall time of production.
(d) It lengthens the time of production while producing a better product.

5. What was the original price, the first purchase cost, for all things?
(a) Labor.
(b) Barter.
(c) Exchange of goods.
(d) Gold.

Short Answer Questions

1. What regulates the price of every particular commodity?

2. Where are the separation of different trades and employments from one another generally found?

3. What is the common instrument of commerce and exchanges in Abyssinia?

4. What is the real measure of the exchangeable value of all commodities?

5. What is the real price of a thing a person wants?

(see the answer key)

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