1. Adam Smith believed people are guided by all of the following except ______

1. Adam Smith believed people are guided by all of the following except ___________.

a) the profit motive

b) self-interest

c) the public good

d) the invisible hand

2.The price system is based on ____________________.

a) government regulation (i.e. the government sets most of the prices)

b) the individual whim of the business person who sets the price

c) the feelings of the individual buyer who decides what a fair price is

d) the interaction of the forces of supply and demand

3. In the United States nearly all resources (factors of production) are owned by ______________.

a) the government

b) business firms

c) individuals/ households

d) foreigners

4. In the circular flow model wages rent interest and profits flow from _____________________.

a) business firms to households

b) households to business firms

c) business firms to government

d) government to business firms

5. In the circular flow model land labor capital and entrepreneurial ability flow from

a) business firms to households

b) households to business firms

c) business firms to government

d) government to business firms