When the "Invisible Hand" Guides Economic Activity, Prices of Products

question 292

Multiple Choice

When the "invisible hand" guides economic activity, prices of products reflect

• A) only the values that society places on those products.
• B) only the costs to society of producing those products.
• C) both the values that society places on those products and the costs to society of producing those products.
• D) none of the above; when the "invisible hand" guides economic activity, prices of products are set by the government in a manner that is thought to be "fair."

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Definitions:

Publicly Held

A designation for a company whose shares are traded publicly on stock exchanges and can be bought by investors.

Privately Held

Describes a business that is owned by private investors, employees, or company founders and not traded publicly on stock exchanges.

Artificial Being

A legal entity, not a natural person, created by law and recognized as having rights and duties.

Corporation

A corporation is a legal entity separate from its owners, offering limited liability protection, and has the ability to raise capital through the issuance of shares.