Question 1 What is an economic policy of letting owners of industry and business set working conditions without interference? A. Capitalism B. Laissez faire C. Utilitarianism D. Socialism

Question 2 Which philosopher felt that government should not interfere with business and the economy would prosper? A. Karl Marx B. Jane Addams C. Andrew Carnegie D. Adam Smith

Question 3 Which of the following is not considered part of Adam Smith’s natural laws of economics? A. The law of the dollar B. The law of self interest C. The law of competition D. The law of supply & demand

Question 4 What is an economic system in which the factors of production are privately owned and money is invested in business ventures to make a profit? A. Capitalism B. Laissez faire C. Utilitarianism D. Socialism

Question 5 Who believed that without war and disease most people would be poor? A. David Ricardo B. Adam Smith C. Karl Marx D. Thomas Malthus

Philosophers Adam Smith Laissez-faire Economics French economic philosophers Believed that government should not interfere with business and the economy would prosper. Smith believed economic liberty guaranteed economic progress.

Smith’s Arguments 3 Natural Laws of Economics 1. The law of self interest People work for their own good 2. The law of competition Competition forces people to make a better product 3. The law of supply and demand Enough goods would be produced at the lowest possible price to meet demand in a market economy

Smith’s Ideas Supported by British economists Thomas Malthus and David Ricardo Formation of laissez-faire capitalism What is Capitalism? An economic system in which the factors of production are privately owned and money is invested in business ventures to make a profit

Malthus Argument Thomas malthus Wrote An Essay on the Principle of Population Population has a tendency to increase more quickly than the available food supply. Without wars, disease and epidemics most people would be poor

Ricardo Argument David ricardo Pinciples of Political Economy & Taxation Poor will continue to be poor Believed in a market system Wages would be lower as population increases

Question 1 What is an economic policy of letting owners of industry and business set working conditions without interference? A. Capitalism B. Laissez faire C. Utilitarianism D. Socialism

Question 2 Which philosopher felt that government should not interfere with business and the economy would prosper? A. Karl Marx B. Jane Addams C. Andrew Carnegie D. Adam Smith

Question 3 Which of the following is not considered part of Adam Smith’s natural laws of economics? A. The law of the dollar B. The law of self interest C. The law of competition D. The law of supply & demand

Question 4 What is an economic system in which the factors of production are privately owned and money is invested in business ventures to make a profit? A. Capitalism B. Laissez faire C. Utilitarianism D. Socialism

Question 5 Who believed that without war and disease most people would be poor? A. David Ricardo B. Adam Smith C. Karl Marx D. Thomas Malthus