How does Adam Smith's idea of the "invisible hand" apply to the various parts, made by many different manufacturers in many different countries, that are used by Apple to produce an iPad?
What will be an ideal response?
Smith used the "invisible hand" reference to explain why markets provide consumers with desired products and services. In the case of the iPad, the invisible hand of the market has led these parts manufacturers to contribute their knowledge and resources to the process that ultimately results in a product available for sale in the United States and around the world.
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Behavioral economists view the standard economic theory of decisions involving time as being too restrictive because people:
A. have lapses in self-control. B. make systematic errors in forecasting the future. C. are reluctant to abandon projects after incurring substantial sunk costs, despite low probabilities of success.
President George W. Bush’s tax cut in 2001 was a rare example of
A. timely monetary policy. B. timely fiscal policy. C. the slow response of policy to events. D. the inability of Congress to react to policy needs.
If the expansionary monetary policy reduces real interest rates in the U.S., which of the following is most likely to occur?
What will be an ideal response?
In the above figure, the area of rectangle ABHG represents the monopolist's
A. average total profits. B. maximized economic profits. C. total costs. D. maximized total revenue.