Adam Smith and Modern Economics: Specialization, Market Systems, and Economic Goals

Who is known as the 'Father of Economics'?

Adam Smith

What significant work did Adam Smith publish in 1776?

'The Wealth of Nations'

What economic theory emphasizes free market economics and self-interest?

Adam Smith's economic principles

What is the main idea behind the famous pin factory example?

Specialization dramatically increases productivity.

What are the benefits of specialization according to Adam Smith?

Increased efficiency, higher productivity, better quality products, lower production costs, improved worker skills, and time savings.

What economic system is characterized by government control over production and distribution?

Command economy or Communism

What is mercantilism?

An economic theory that countries gain wealth by accumulating gold and silver through trade.

What are the three basic economic questions every society must answer?

What to produce, how to produce, and who consumes the products.

What does 'economic efficiency' aim to achieve?

Maximizing production based on people's wants and needs.

What is the opportunity cost of economic freedom?

Not everyone has the opportunity to make their own choices, leading to some experiencing poverty.

What role does innovation play in economic growth?

Innovation increases efficiency of production and introduces new goods and services.

What type of economy relies on tradition and custom?

Traditional economy

What defines a market economy?

Decisions are made by individuals through trade in a free market.

What is a mixed economy?

A market-based system with limited government interference.

What is the significance of Adam Smith's 'The Theory of Moral Sentiments'?

It lays the groundwork for understanding morality in economics.

What is economic equity?

Striving for fairness in the distribution of goods and services.

What is the impact of specialization on global trade?

It enhances comparative advantage and economic interdependence.

What does 'factor payments' refer to?

Income received for supplying factors of production, such as rent, wages, profits, and interest.

What is the goal of economic security?

To ensure that goods are available and payments are made on time.

What does economic growth require?

An economy must grow to provide jobs for its population.

What is the role of globalization in specialization?

It allows countries and companies to focus on core competencies and enhance efficiency.

What is the relationship between economic systems and societal values?

Economic systems reflect the values and goals of a society.

What does the term 'economic freedom' encompass?

The ability to own property, become an entrepreneur, and seek employment.

How does specialization affect worker skills?

It leads to improved skills as workers focus on specific tasks.

What is the significance of the division of labor?

It allows for specialization, leading to increased efficiency and productivity.