When the Invisible Hand Is at Work

question 26

Multiple Choice

When the invisible hand is at work,

• A)the price system will sometimes give incorrect cost signals to consumers.
• B)the price system will allocate resources based only on consumer need.
• C)all prices will be set equal to marginal costs.
• D)there will be some shortages and surpluses that cannot be avoided.

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Definitions:

Dysfunctional Thinking

Distorted, irrational thoughts that can contribute to and exacerbate emotional disorders, leading to maladaptive behavior.

Rational Thinking

The process of logical or sound reasoning, often involving critical thinking and the evaluation of facts and information.

Transference

In psychoanalysis, the process by which patients project feelings about important figures in their life onto the therapist.

Approval

The act of agreeing with, accepting, or endorsing something or someone, often officially.