The idea that firms and resource suppliers in seeking to further their own self-interests in a competitive market economy also simultaneously promotes the public or social interest is a description of:
a. The "invisible hand"
b. The guiding function of prices
c. "Dollar votes"
d. Capital accumulation
a. The "invisible hand"
You might also like to view...
If an increase in the price of good X leads to a decrease in the demand for good Y, then:
A. good X is a normal good and good Y is an inferior good. B. good X and good Y are complements. C. good X and good Y are normal goods. D. good X and good Y are substitutes.
In the circular flow model, households demand resources such as labor services in the product market
Indicate whether the statement is true or false
Despite the large federal deficits during the last few decades, public capital in the U.S. declined because: a. a growing share of the federal budget goes toward income redistribution, especially for the elderly. b. of less labor productivity
c. of increasing farm subsidies. d. of the growing portion of the national debt owed to foreigners. e. a growing share of the federal budget goes toward income redistribution, especially for national defense
From Example 1.2 in the textbook, Pindyck and Rubinfeld distinguish between the mass market and dealer market for bicycles. Although there are many dealers in the U.S. and only a few mass merchandisers, we should expect the dealer market to be somewhat less competitive than the mass market. Why?
D B and C are correct. A Due to their differences in quality and performance, dealer bicycles are not close substitutes. (A) C Dealers are small sellers and have little control over bicycle prices. B The geographic extent of the market for dealer bicycles is typically small, so the individual sellers do not have many local competitors. (B) E A and B are correct.