The invisible hand principle indicates that competitive markets can help promote the efficient use of resources
a. only if buyers and sellers really care, personally, about economic efficiency.
b. if, and only if, businesses recognize their social obligation to keep costs low and use resources wisely.
c. even when each market participant cares only about their own self-interest rather than about the overall efficiency of resource use.
d. even if business firms fail to produce goods efficiently.
c. even when each market participant cares only about their own self-interest rather than about the overall efficiency of resource use.
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The money demand curve will shift to the left if:
A. the price level increases. B. the nominal interest rate increases. C. the nominal interest rate decreases. D. real income decreases.
An imperfectly competitive firm has the following total cost curve: C = 100 + 4Q. What is average total cost equal to when Q = 10?
What will be an ideal response?
Discuss some of the changes in the organization of the economic systems of countries transitioning from communism to capitalism. How does this type of market reform increase economic efficiency?
What will be an ideal response?
Which of the following would happen if a law were passed imposing a price ceiling that holds the interest rate charged on credit cards at a rate below the prevailing market rate?
a. The quantity demanded of credit card debt will decrease from its original level. b. The quantity supplied of credit card debt will increase from the original level. c. The quantity demanded will exceed quantity supplied. d. The quantity demanded and supplied of credit card debt would not change.