Lesson 7 pg. 24-26

Question 1

What is the practical purpose or aim of economists?

Answer 1

> The practical purpose or aim of economics is to increase the prosperity of a people, nation, or the whole world and to thereby increase the wealth.
That is why Adam Smith entitled his famous book “An Inquiry into the Nature and Causes of the Wealth of Nations”

Question 2

Define prosperity

Answer 2

prosperity - economic success, or the condition of enjoying many goods, including services

Question 3

define wealth

Answer 3

> wealth - value of all things that people own

Question 4

List the various methods that have been used by countries in the past in efforts to increase their wealth or to diminish their poverty

Answer 4

1. Produce more goods from existing resources
2. Increase the amount of resources available for the production of goods
3. Find new resources to satisfy existing wants
4. Make goods already being produced more effective in satisfying wants
5. Reduce people’s wants
6. Redistribute the goods that are already being produced among the population

Question 5

Define labor

Answer 5

> goods can be produced only through some amount of labor - human activity which results in the creation of goods and services

Question 6

What is the true source of prosperity?

Answer 6

The true source of prosperity is diligent work directed by ingenious intelligence allowed to develop under conditions of freedom.