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This quiz consists of 5 multiple choice and 5 short answer questions through End of Book 3 & Book 4, Chapter 1.

Multiple Choice Questions

1. What happens if the supply of a commodity is greater than the demand for it?
(a) The merchant returns the goods.
(b) The price drops.
(c) The commodity goes to waste.
(d) The price rises.

2. What is true about the amount of metal coins which circulate in a society?
(a) They fluctuate the revenue of the society.
(b) They have no relation to the revenue of the society.
(c) They are equal to the revenue of the society.
(d) They can never be equal to the revenue of the society.

3. Where should the capital of a manufacturer generally reside?
(a) At the cheapest location.
(b) At the most productive location.
(c) At a location within his country.
(d) At a location close to his raw materials.

4. What does the author consider to be a wasteful use of gold?
(a) Flatware.
(b) Gilding and plating.
(c) Goblets.
(d) Picture frames.

5. Originally, what did sailors fear?
(a) Navigating on a cloudy night.
(b) That islands moved around in the sea.
(c) That their compasses were inaccurate.
(d) Being out of sight of the shore.

Short Answer Questions

1. What is true of the capital employed in agriculture and in the retail trade of any society?

2. What are the three original sources of all revenue?

3. What kind of capital is employed in raising, manufacturing, or purchasing goods, and selling them again with a profit?

4. The ordinary or average rates of wages, profit, and rent may also be called what?

5. What kind of revenue remains free to a country after deducting the expense of maintaining their fixed circulating capital?

(see the answer key)

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