1. Four social inventions that support markets are (1) __________, which specify the terms of exchange; (2) __________, which reduce the risk of entrepreneurs; (3) __________, which increases the...

1. Four social inventions that support markets are (1) __________, which specify the terms of exchange; (2) __________, which reduce the risk of entrepreneurs; (3) __________, which increases the profitability of inventions; and (4) __________ rules, which provide potential investors with reliable information about the financial performance of firms.

2. In a market economy, __________ specify the terms of exchange, facilitating exchange between strangers.

3. To explain the virtues of markets, Adam Smith used the metaphor of the invisible pancreas.__________ (True/False)

4. An economy in which people exchange goods and services in a market is called a __________ economy.