Adam Smith, the father of modern economics wrote in his book, An Inquiry into the Nature and Causes of the Wealth of Nations, "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner but from their regard to
their own interest." Explain what he meant by that statement and how such behavior promotes the wealth of a nation.
The statement refer to the fact that people act in their own self interest. For example, the butcher who sells meat and the baker who bakes bread carry out these activities because these tasks contribute to their livelihood, not because they are concerned about the diner. Nevertheless, their actions benefit the diner. This is precisely one of the virtues of a market: people do not have to act virtuously to produce worthwhile outcomes. Producing goods and services that consumers value increases the wealth of a nation.
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Sensitivity analysis of the results may include the following with the exception of
A) stability over time analysis of the estimated multipliers. B) using homoskedasticity only rather than HAC standard errors. C) investigation of omitted variable bias. D) looking at different computations of the HAC standard errors.
An economist left his $100,000-a-year teaching position to work full-time in his own consulting business. In the first year, he had total revenue of $200,000 and business expenses of $150,000 . He made a(n):
a. implicit profit. b. economic loss. c. economic profit. d. accounting loss but not an economic loss. e. zero economic profit.
Most people who live in market-oriented economies would
a. oppose trying to block better products that lower the cost of services. b. support trying to block better products that lower the cost of services. c. oppose trying to block better products that lower the cost of labor. d. support trying to block better products that lower the cost of labor.
The marginal-cost curve intersects the average-fixed-cost curve at the minimum of marginal cost
a. True b. False Indicate whether the statement is true or false