In His Book, an Inquiry into the Nature and Causes

question 178

Multiple Choice

In his book, An Inquiry into the Nature and Causes of the Wealth of Nations, economist Adam Smith argued that individuals

• A)always tend to act in an altruistic manner.
• B)always consider the impact of their actions on the welfare of others.
• C)are motivated by self-interest.
• D)are generally not concerned with economic questions.

Recognize the role of authorities and regulatory bodies in mitigating negative externalities to improve welfare.

Identify and analyze the externalities in various market situations, including common resources and public goods.

Understand the importance of property rights and how their allocation affects market outcomes and distribution.

Analyze the impact of cooperative versus non-cooperative behavior in markets with externalities.