1. In the explanation of Adam Smith's argument in favor of replacing the guild system with a market system, the textbook states that "a key to understanding Smith's argument is the assumption that individuals usually act in a rational, self-interested way." Did Smith believe that the success of a market system requires that people act selfishly?
2. 2.Comment briefly on the following statement: "The circular-flow diagram implies that the income household members receive is directly related to the market value of the resources they own."
3. 3.Could a production possibilities frontier ever slope upward?
4. Create an example showing that absolute advantage in an activity does not necessarily imply comparative advantage in an activity.