Understanding Economics

Lesson 2: The Problem of Poverty:
Are We Unable to Produce Enough?

Please read chapters 3 - 10 and Overpopulation... .

1. What is the problem of poverty, as defined by Henry George? Does poverty still accompany progress?            | Text |

2. Before wages can be paid            | Text |

a. workers must be documented.
b. labor must produce wealth.
c. there must be orders for the finished goods.
d. capital must be stored up.
e. taxes must be withheld.
3. Which statement is correct?            | Text |

a. Capitalists provide employment opportunities for laborers.
b. Entrepreneurs perform no labor; they exploit the labor of others.
c. Labor uses capital in the production of wealth.
d. Capital is necessary for all production.
e. All of the above.
4. What is the Malthusian theory, often advanced to explain the persistence of poverty?            | Text |

5. Overpopulation is to poverty as            | Supplement |

a. gravity is to falling.
b. sunspots are to epidemics.
c. pain is to being punched.
d. cricket is to Britain.
6. Birth rates tend to fall            | Supplement |

a. in poor regions where there is widespread hunger.
b. where living standards improve.
c. where organized religion is less influential.
d. when there are large rural-to-urban migrations.
e. in socialist nations.
7. Why does increase of population increase the power to produce wealth?            | Text |

8. Can the problem of poverty be explained by any deficiency in the capacity to produce wealth? Explain your answer.           | Text |

9. Workers exchange their labor for money wages because

a. they are forced to do so by the capitalistic system.
b. they are afraid to take risks.
c. it allows them to satisfy their desires with less exertion.
d. they value being part of a community.
10. In political economy, what is the distribution of wealth? What is the purpose of our three-factor conception of production and distribution?            | Supplement |

11. In political economy, "economic profit"            | Supplement |

a. is simply an accounting term.
b. is often confounded with unearned incomes.
c. is the payment for innovation and entrepreneurship; it's part of wages.
d. none of the above.