The “invisible hand” cannot fully work when government economic polies are in place. Explain
Please provide the best answer for the statement.
The “invisible hand” moves the economy toward the efficient allocation by allocating resources to their best uses. When government economic policies restrict the free market, a misallocation of resources can occur. Unless government takes action to correct these allocations the market will remain inefficient. Government action can take a significant amount of time and full information may not be available to the government officials.
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Most of the income received by families and individuals in the United States arises from the ownership of
A) capabilities embodied in human beings. B) corporations. C) industrial, commercial, and residential real estate. D) stocks, bonds, and other financial instruments. E) transnational business enterprises.
If consumers spend their income either on gasoline or food, then an increase in the price of gasoline rotates the budget line
A) inward along the "food" axis. B) outward along the "food" axis. C) inward along the "gasoline" axis. D) outward along the "gasoline" axis.
Milk costs $2 and the last unit provides $4 in marginal utility. Cheese costs $4 and the last unit provides $2 in marginal utility. Is this an efficient allocation of resources? If so, why? If not, why not?
If a natural monopoly faces a relatively inelastic consumer demand over the range of the production, it will have an incentive to:
A. sell more. B. advertise more. C. charge a low price. D. charge a high price.