The Concept of "Invisible Hand" Introduced by Adam Smith Explains

question 11

Multiple Choice

The concept of "invisible hand" introduced by Adam Smith explains:

• A)why people act in their own best interests.
• B)why the government intervenes to overcome failures in private markets.
• C)how people,acting out of self-interest,unintentionally promote the general good.
• D)how comparative advantage and specialization promote international trade.
• E)how the creation of goods and services generates its own demand by creating employment and income.

---

Definitions:

Trade (Functional)

The activities and processes involved in the distribution of goods and services, facilitating the movement from producer to consumer while adding value through functions like transportation and warehousing.

Quantity Discounts

Quantity discounts refer to the reductions in price given by suppliers to buyers based on the volume of goods purchased.

Quantity Discounts

Price reductions offered to customers who purchase in large volumes, encouraging bulk buying and fostering customer loyalty.

Unit Costs

The cost incurred to produce, store, and sell one unit of a product, including materials, labor, and overhead expenses.