The Invisible Hand Principle suggests that
a. market prices direct individuals to produce more goods.
b. individuals pursuing their own interests detract from the economic well-being of society.
c. there should be stronger governmental initiatives to ensure cooperation for the betterment of society.
d. market forces tend to channel the actions of self-interested individuals into activities that promote the general betterment of society.
D
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Which if the following is a key difference between profit-oriented institutions (such as small businesses) and non-profit institutions (such as governments, hospitals, or schools)? Profit-oriented institutions
A) are usually competitive rather than cooperative. B) have a recognized residual claimant. C) pursue private interests rather than the public interest. D) rely on monetary incentives to secure the cooperation required for their functioning. E) work through market processes.
Which of the following is NOT a private cost?
A) the health insurance costs a firm must pay for its employees B) the pollution caused by a firm dumping its wastes into the river C) the coffee pot that Jan dropped and broke this morning D) the amount that a firm must pay for raw materials to make its product
If Daniel produces one pair of shoes in 4 hours and Sarah produces one pair of shoes in 3 hours, then
a. Sarah has a comparative advantage in shoemaking b. Daniel has a comparative advantage in shoemaking c. Sarah has an absolute and a comparative advantage in shoemaking d. Daniel has an absolute and a comparative advantage in shoemaking e. Sarah has an absolute advantage in shoemaking
Using the aggregate expenditure-output model, assume the aggregate expenditures (AE) line is below the 45-degree line at full-employment GDP. This vertical distance is called a(n):
a. inflationary gap. b. recessionary gap. c. negative GDP gap. d. marginal propensity to consume gap.