1) According to Adam Smith, the differences between people professionally is the

Question

1) According to Adam Smith, the differences between people professionally is the natural result of the skills people are born with.

True

False

2) In the Friedman Article, rent controls are an example of government setting prices

Above the market price

Below the market price

3) The American Cast Iron Pipe Company (ACIPCO), due to high employee costs, was a very unprofitable company.

True

False

4) McWane, due to its unethical activities, was a very unprofitable company.

True

False

Above the market price

Below the market price

Explanation / Answer

Question 1

Adam Smith stated that all persons are born equal and any difference in skill and ability that one sees between them is due to the training and education acquired by the respective person.

So, according to Adam Smith, the difference between people professionally is not the natural result of skiils people are born with.

Hence, the given statement is False.

Question 2

In his article, Friedman has analyzed the intervention of government in house renting market and has stated that government intervention in terms of fixing rent below the market price has resulted in distortion and subsequent shortage.

So,

Rent controls are an example of government setting prices below the market price.

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