When economists refer to "the invisible hand," what do they mean?
What will be an ideal response?
In his book, Wealth of Nations, Adam Smith wrote that a participant in a competitive market is "led by an invisible hand to promote an end which was no part of his intention." Market participants act in their own self-interest, attempting to maximize their own well-being, yet, in the process, the result is an efficient use of resources. This result occurs because the market forces of supply and demand invisibly guide resources to their highest valued uses.
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If Massage R Us, a spa chain specializing in massage, offers a lower price for a massage to senior citizens, this is an example of ________.
A) second-degree price discrimination B) first-degree price discrimination C) third-degree price discrimination D) zero-degree price discrimination
The shifting of trade to countries in a regional group at the expense of trade with countries not in the group is known as trade internalization.
a. true b. false
The manager of Greene Enterprises, Inc., recently estimated its average variable cost (AVC) function to beAVC = 88 - 0.026Q + 0.000003Q2Greene Enterprises faces total fixed costs (TFC) of $300,000. When Greene's output is 6,000 units, average variable cost (AVC) is
A. rising B. falling C. greater than short-run marginal cost D. less than short-run marginal cost E. both a and d
If prices have risen 220 percent since the base year, the current level of the CPI is
A. 20. B. 120. C. 220. D. 320.