Which of the following statements best describes the invisible hand as described by Adam Smith in The Wealth of Nations?
a. It describes how the world should be.
b. Society should focus on other people.
c. Self-interested behavior by individuals can lead to positive social outcomes.
d. Self-interested behavior by individuals is harmful to society.
c. Self-interested behavior by individuals can lead to positive social outcomes.
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In the prisoner's dilemma,
a. the prisoners easily collude in order to achieve the best possible payoff for both b. only one player has a dominant strategy c. each player has a dominant strategy d. playing the dominant strategy leads to a better payoff for one prisoner than if the two jointly selected a strategy e. playing the dominant strategy leads to a better payoff for both prisoners than if the two jointly selected a strategy
Deadweight loss:
A. occurs when the market price is set above the equilibrium price. B. occurs when the market price is set below the equilibrium price. C. is the loss of total surplus that results when the quantity of a good that is bought and sold is below the market equilibrium quantity. D. All of these are true.