According to the invisible hand theorem, as stated in the text,
A. even non-competitive markets are able to achieve Pareto efficient outcomes.
B. an equilibrium produced by competitive markets will exhaust all gains from exchange.
C. non-market forces can prevent the markets from guiding consumers to the contract curve.
D. government interaction is sometimes needed as an invisible hand to lead the economy toward efficiency.
Answer: B
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What will be an ideal response?
In the process of reducing pollutants in our environment, we are
A) achieving a cleaner environment at no real cost. B) causing higher levels of unemployment. C) reallocating resources in an inefficient manner. D) trading off less of other goods and services for a cleaner environment.
Protective tariffs help a nation reach which of the following goals?
a. Decreased domestic consumer prices. b. Increased domestic employment. c. Increased amount of goods for consumers to purchase. d. Increased competition among domestic and foreign producers. e. None of these.
When the equilibrium dollar price of a foreign currency decreases due to changes in demand for or supply of the foreign currency, the foreign currency
A) has appreciated. B) has depreciated. C) is overvalued. D) is undervalued. E) is devalued.