Which of the following most accurately describes the invisible hand concept?
a. Wise central planning by government is necessary for the efficient use of resources.
b. In a democratic setting, majority rule will result in the efficient use of resources.
c. In a market setting, when individuals pursue their own interests, they simultaneously tend to promote the public interest.
d. In a market setting, when individuals pursue their own interests, they tend to engage in activities that lower the overall economic welfare of society.
C
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When two variables move in opposite directions, they are said to be:
A) uncorrelated. B) positively correlated. C) negatively correlated. D) directionally correlated.
The utility of a good is:
a. different for different consumers. b. the same for all consumers. c. constant no matter how much is consumed. d. related to the cost of producing it. e. easily measured.
If most firms in an industry are earning a 7 percent rate of return on their assets, but your business is earning 9 percent, your rate of economic profit is
a. minus 2 percent. b. 2 percent. c. 9 percent. d. 16 percent.
In a decreasing-cost industry:
A. there will be no firm entry because the increased supply will reduce the long-run equilibrium price. B. the law of demand does not apply. C. greater demand leads to higher long-run equilibrium prices. D. lower demand leads to higher long-run equilibrium prices.