BUSINESS 101 | Chapter 2 Questions
and Answers 2026 Updated.
ECONOMY: - Answer The study of how society changes to employ resources to produce
goods & services & distribute them for consumption among various competing groups and
individuals.
ECONOMIC SYSTEMS: - Answer The study of the allocation of scarce resources.
MACROECONOMICS: - Answer The study of how an entire economy will respond to changes
in scarcity and the nation's economy as a whole (price/value).
MICROECONOMICS: - Answer The study of how the smallest unit in economic system
respond to changes in scarcity & behaviors of people & organization in particular markets
(price/value).
ADAM SMITH? WHAT DID HE DO? WHY SHOULD WE CARE? - Answer Capitalism (proud to be
American), book of wealth of nations
WEALTH OF NATIONS: - Answer 1776|
Wealth must be re-distrusted per leader's view of fairness
Progressive taxation - taxes the most productive the most.
•Discourages | those producing the most from producing more.
•Encourages | less productive to qualify for govt. benefits.
ADAM SMITH'S BELIEFS - Answer •BELIFS: All have the natural rights to own & protect
property.
•BELIFS: All are materialistic.
•BELIFS: All are rational/seek their own best economic well-being.
•BELIFS: In a free marketing consumers receive the best products at the low prices competition.
ADAM SMITH'S PERCEIVED THREATS TO CAPITALISM - Answer •Large & powerful
government.
and Answers 2026 Updated.
ECONOMY: - Answer The study of how society changes to employ resources to produce
goods & services & distribute them for consumption among various competing groups and
individuals.
ECONOMIC SYSTEMS: - Answer The study of the allocation of scarce resources.
MACROECONOMICS: - Answer The study of how an entire economy will respond to changes
in scarcity and the nation's economy as a whole (price/value).
MICROECONOMICS: - Answer The study of how the smallest unit in economic system
respond to changes in scarcity & behaviors of people & organization in particular markets
(price/value).
ADAM SMITH? WHAT DID HE DO? WHY SHOULD WE CARE? - Answer Capitalism (proud to be
American), book of wealth of nations
WEALTH OF NATIONS: - Answer 1776|
Wealth must be re-distrusted per leader's view of fairness
Progressive taxation - taxes the most productive the most.
•Discourages | those producing the most from producing more.
•Encourages | less productive to qualify for govt. benefits.
ADAM SMITH'S BELIEFS - Answer •BELIFS: All have the natural rights to own & protect
property.
•BELIFS: All are materialistic.
•BELIFS: All are rational/seek their own best economic well-being.
•BELIFS: In a free marketing consumers receive the best products at the low prices competition.
ADAM SMITH'S PERCEIVED THREATS TO CAPITALISM - Answer •Large & powerful
government.
