The "invisible hand" refers to the notion that
A) competitive markets send resources to their highest valued uses.
B) government intervention is necessary to ensure efficiency.
C) marginal benefit decreases as more is consumed.
D) marginal cost increases as more is produced.
E) no matter what allocation method is used, the resulting production is efficient.
A
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Suppose that tattoos gained immense popularity with retired people as well as college students. This gain in popularity best reflects which of the following influences on buying plans?
A) the price of a substitute good B) income C) expectations D) preferences E) the price of a complement good
Subsidies ________ the price paid by the buyer and ________ the price received by the seller
A) increase, increase B) increase, decrease C) decrease, increase D) decrease, decrease E) do not change; increase
Among the sources of economic inefficiency are all of the following EXCEPT
A) price regulations. B) rapid technological change. C) monopoly. D) taxes and subsidies.
According to the capture hypothesis, it appears that regulators eventually end up
A) adopting policies that benefit the firms being regulated. B) adopting policies that benefit consumers at the expense of the regulated firms. C) adopting policies that benefit no one. D) satisfying neither producers nor consumers, but striving to control as much as possible.