Which of the Following Is Necessary for the Invisible Hand

question 231

Multiple Choice

Which of the following is necessary for the invisible hand of market prices to work properly?

• A) buyers and sellers who generally tend to disregard their own self-interest
• B) democratic political procedures and highly regulated markets
• C) price controls that restrict the movement of market prices
• D) competition and property rights that are well-defined and enforced

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Definitions:

Gross Profit

The difference between sales revenue and the cost of goods sold, indicating the basic profitability of a company's core business activities.

Perpetual Inventory System

An accounting method that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management.

LIFO

"Last In, First Out," an inventory valuation method where the latest goods purchased are the first to be sold.

Inventory Cost Card

A record-keeping tool that tracks the cost associated with a specific item of inventory, detailing purchases, sales, and adjustments.