The invisible hand principle indicates that when individuals are directed by prices determined in competitive markets, their actions will tend to promote the efficient use of resources
A) even when each market participant cares only about their own self interest rather than the overall efficiency of resource use.
B) even if business firms fail to produce goods efficiently.
C) only if buyers and sellers personally care about economic efficiency.
D) if, and only if, businesses recognize their social obligation to keep costs low and use resources wisely.
A) even when each market participant cares only about their own self interest rather than the overall efficiency of resource use.
You might also like to view...
Which of the following bond types is the MOST safe?
How is the Solow residual measured? What problems arise in its measurement when resource utilization varies over the business cycle? What implications do these measurement issues have for evidence supporting the RBC model?
What will be an ideal response?
Newspaper accounts of the U.S. labor market often point out that many people are working more hours than their parents did. What might explain this phenomenon?
A) the substitution effect B) the endowment effect C) bounded rationality D) the income effect
Exhibit 4-2 Supply and demand curves
In Exhibit 4-2, a decrease in quantity demanded would cause a movement from which equilibrium point to another, other things being equal?
A. E1 to E2. B. E1 to E3. C. E4 to E1. D. E3 to E4.