The "invisible hand" is
a. used to describe the welfare system in the United States.
b. a concept developed by Adam Smith to describe the virtues of free markets.
c. a concept used by J.M. Keynes to describe the role of government in guiding the allocation of resources in the economy.
d. a term used by some economists to characterize the role of government in an economy — inevitable but invisible.
b
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It is not uncommon for people to say something like, "If we can put someone on the moon we should be able to . . . ," followed by the person's favorite project. What response can an economist make to this person?
What will be an ideal response?
Suppose that wages are higher in one geographic region (Region 1) of a country than in another geographic region (Region 2). Given free migration of workers,
a. wages in the two regions will become even more divergent. b. wages in Region 1 will rise. c. wages in Region 2 will rise. d. employment in Region 2 will rise.