The invisible hand principle indicates that competitive markets can help promote the efficient use of resources
What will be an ideal response?
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 apparent conflict between the time-series and cross-section evidence on the U.S
saving ratio, where cross-section studies predict a long-run ________ in the ratio that does not emerge from the time-series studies, is ________ by the permanent-income and life-cycle hypotheses. A) rise, resolved B) rise, created C) fall, resolved D) fall, created
If a consumer places a value of $20 on a particular good and if the price of the good is $25, then the
a. consumer has consumer surplus of $5 if he buys the good. b. consumer does not purchase the good. c. price of the good will rise due to market forces. d. market is out of equilibrium.