Which best describes the "invisible hand" concept?
A. The market system works best when resources are highly substitutable.
B. The problem of scarcity can best be overcome in a system of mixed capitalism.
C. Highly detailed central direction of an economy will maximize the public's best interests.
D. The desires of producers and resource suppliers to further their own self-interest will tend to promote the social interest.
Answer: D
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A widget costs $50 in the US and CAD$53 in Canada. The current exchange rate is 1USD=1.09CAD. Given purchasing power parity, the Canadian dollar would_______to equilibrate prices
a. Appreciate b. Depreciate c. Not change d. None of the above
Which of the following best describes a production function?
a. The relationship between the quantity of labor employed and total cost. b. The relationship between consumer preferences and market demand. c. The relationship between price and quantity supplied by sellers in a market. d. The relationship between the amount of resources employed and the total output produced by a firm.
If the reserve requirement is 12 percent and banks desire to hold no excess reserves, when a bank receives a new deposit of $1,000,
a. it must increase its required reserves by more than $150. b. its total reserves initially increase by $120. c. it will be able to make new loans up to a maximum of $880. d. None of the above is correct.
When we graph total utility, the total utility curve will
A) always be increasing. B) always be decreasing. C) be increasing as long as marginal utility is positive. D) be horizontal if marginal utility is positive.