In Adam Smith's trade theory, ______ is the only factor of production and is of one quality (homogeneous).
A) land
B) labor
C) capital
D) entrepreneurship

Question

Quizplus · Accepted Answer

According to Adam Smith's trade theory, the only factor of production is labor and it is of one quality, homogeneous. Therefore, the best choice would be to focus on maximizing the efficiency and productivity of labor in order to achieve the highest level of output. This would be represented by moving along the production possibilities frontier, rather than trying to shift it outward through the introduction of new factors of production such as capital or entrepreneurship.

In Adam Smith's Trade Theory, ______ Is the Only Factor