Adam Smith coined the term "invisible hand" to describe the process by which the actions of independent, self-interested buyers and sellers will:
A. always lead to the most efficient allocation of resources.
B. often lead to increasing inequality.
C. always lead an economy to ruin.
D. often lead to the most efficient allocation of resources.
Answer: D
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Refer to Figure 1-4. Which of the following statements is true?
A) The slope of the tangent at E and the slope of the tangent at F are negative. B) The slope of the tangent at E is positive and the slope of the tangent at F is negative. C) The slope of the tangent at E is negative and the slope of the tangent at F is positive. D) The slope of the tangent at E and the slope of the tangent at F are positive.
Refer to Scenario 7.1. The total cost to produce 50 cookies is
A) $20 B) $25 C) $50 D) $60 E) indeterminate
If the demand increases in a perfectly competitive market, firms will likely:
A. experience a loss due to increased competition. B. set prices artificially higher permanently. C. enter the market in hopes of capturing some profits. D. have to engage in more advertising in order to further stimulate the increase in demand.
Under a system of freely floating exchange rates, an increase in the international value of a nation's currency will:
A. cause an international surplus of its currency. B. contribute to disequilibrium in its balance of payments. C. cause gold to flow into that country. D. cause its imports to rise.