1. Consider Adam Smith and his views

a) In Ancient Rome, senators such as Cicero were concerned about the large quantities of silver

leaving the Roman Empire as the Roman rich bought huge quantities of silk from the East. What

would Smith argue to try to diminish Cicero’s fears?

b) To what extent does the division of labor and exchange reinforce one another?

c) Why would Smith generally argue against tariffs? (Don’t just say that tariffs are bad but

explain their problems.)

d) If someone believed that certain industries (perhaps manufacturing) created positive

externalities then why might this person disagree with Smith regarding tariffs and trade?

e) How do prices help “The Invisible Hand” to benefit society?

Answer rating: 100% (QA)

a Adam Smith would likely argue that allowing individuals the freedom to engage in trade and pursue their selfinterest would lead to a more efficient ... View the full answer