Which of the following is a major implication of the invisible hand concept?
a. Government-operated firms tend to have lower costs than private sector firms.
b. When directed by competitive market prices, the actions of self-interested individuals will tend to promote overall economic prosperity.
c. Prosperity cannot be achieved unless the selfish nature of people can be changed.
d. Competition is harmful to the health of an economy because it results in wasteful duplication.
b. When directed by competitive market prices, the actions of self-interested individuals will tend to promote overall economic prosperity.
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The figure above shows the market for pants. If 6 million pairs of pants are produced, the deadweight loss is
A) zero. B) the triangle ABE. C) the triangle BCE. D) the triangle ACE. E) the triangle BCE minus the triangle ABE.
Within the IS-LM curve model, if the government cut taxes at the same time that there was an autonomous increase in investment demand, then
a. income would rise and the interest rate would fall. b. income and the interest rate would rise. c. income would rise but the effect on the interest rate is uncertain. d. the interest rate would rise but the effect on income is uncertain. e. the effects on both income and the interest rate are uncertain.
Self insurance refers to: the practice of setting aside funds to pay for medical care expenses instead of paying premiums to an insurance company. Approximately, _______ of all employees who participate in group insurance plans work for firms that self-insure
a. starting one's own insurance company b. buying insurance from a not for profit entity c. setting aside fund to pay for medical care expenses instead of buying insurance d. none of these e. both a and b
Lower real income ________ the demand for money and a lower price level ________ the demand for money.
A. decreases; decreases B. increases; increases C. increases; does not change D. increases; decreases