What does the concept of "invisible hand" imply?
What will be an ideal response?
The "invisible hand" is an idea in economics that suggests that when all assumptions of a perfectly competitive market are in place, the pursuit of individual self-interest promotes the well-being of society as a whole, almost as if the individual is led by an invisible hand to do so. Thus, under perfect competition, when individuals are working to maximize personal profits, they end up promoting social interests.
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According to economic theory, elected government officials will favor
A) federal budget surpluses. B) balanced federal budgets. C) federal budget deficits. D) shrinking federal budgets.
The law of diminishing returns implies that, with the quantity of capital fixed, as the use of labor rises
A) total product will fall eventually. B) the marginal product of labor will fall eventually. C) the total product of labor will fall below the marginal product of labor. D) the production process will become technologically inefficient eventually.
The GDP can overstate the economy because ___________.
a. it excludes self-production, increased leisure time, and improved health. b. it includes self-production, increased leisure time, and improved health. c. it excludes harm caused by pollution, crime, and income inequality. d. it includes harm caused by pollution, crime, and income inequality.
The two "goods" used when economists analyze labor supply are
a. work and leisure. b. work and consumption. c. saving and consumption. d. leisure and consumption.