Question

In his famous book The Wealth of Nations, Adam Smith argues that:

	a.	producers are motivated by pride
	b.	economic agents are motivated by rational self-interest
	c.	producers are motivated by wishing to maximise welfare in society
	d.	welfare is maximised by minimising selfishness
	e.	business profits at consumers expense

Answer 1

Question:

In his famous book The Wealth of Nations, Adam Smith argues that:

	a.	producers are motivated by pride
	b.	economic agents are motivated by rational self-interest
	c.	producers are motivated by wishing to maximise welfare in society
	d.	welfare is maximised by minimising selfishness
	e.	business profits at consumers expense

Sol: The correct option is b (economic agents are motivated by rational self-interest)

• According to Adam Smith, he argued in his famous book " The Wealth of Nations" that people should be given freedom to produce and exchange the goods and services in both domestic and foreign market as of their interest because it promotes self interest to produce and earn, which ultimately gives motivation and prosperity.
• Strict rules and regulations restricts people's activity and ultimately slows down their interest in producing.