1. What is the “invisible hand” and what role does it play in the economy? The “invisible hand” is the driving force behind an individual preferring the support of the domestic industry and ending up benefiting the society as a whole. When people pursue their own interest and gain, they end up unintentionally promoting domestic and foreign industry in society, and they also end up being more successful than those who affected to trade for the public good.

2. According to Smith, why should government not get involved in the economy? He says that according to the system of natural liberty, every man has the rights to pursue his own interest in his own way and that it is not the sovereign’s duty to take charge of the economy. Also, the position of taking over an economy would be a very dangerous job and it would be impossible to safely trust anyone who would take such a position. Having a position like that would also attract unneccesary attention.

3. The ideas and values of what other enlightenment thinkers are evident in this excerpt? John Locke is definitely evident in this excerpt because Smith makes references to the “system of natural liberty” which Locke promoted was an avid supporter of.  Rousseau’s ideals are also evident because he had an optimistic mindset of people and he was against elites taking control.

4. What is the division of labor and how does it make production more efficient? The division of labor is made up of three things: the increase of dexterity in workmen, the time saved which is usually lost from passing one species of work to another, and the invention of machines that help limit the amount of human labor needed. With more time and more skilled workers, production is much more efficient because it takes less time to produce more.

5. How does Smith illustrate the division of labor through the pin factory? He uses the pin factory as an example to show that much more pins could be produced by men who were educated in this particular field and knew what they were doing rather than from random men who just started working. He also shows how each job that seems insignificant really plays a major role in the making of each pin.

6. How is the pin factory’s increase in productivity evident as a result of the division of labor? With the help of machinery, skilled workers, and more time, much more pins were able to be produced each day.

7. What is the relationship betwen the division of labor and the skill of the worker? The more skilled a worker is, the faster they can complete their job, which quickens the amount of time needed to complete each task.