Which of the following examples shows Adam Smith’s “invisible hand”?
a. Millions of people through buying and selling adjust how resources such as steel are used.
b. The Federal Trade Commission uses consumer protection laws to adjust resource allocation.
c. The five largest banks adjust loan interest rates, which affect the free market.
d. Five countries form a trade agreement that spurs the economy in each country.
a. Millions of people through buying and selling adjust how resources such as steel are used.
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What will be an ideal response?
The social marginal cost curve is higher than the private marginal cost curve
a. True b. False Indicate whether the statement is true or false
Social Security benefits funded by from dividends from the Social Security Trust Fund.
Answer the following statement true (T) or false (F)
Given that most people like the smell of baking cinnamon rolls and dislike the smell of burning tires, baking cinnamon rolls generates ________ externality, and burning tires generates ________ externality.
A. no; a negative B. a positive, no C. a positive; a negative D. a negative; a positive