According to the Concept of the "Invisible Hand," If Susie

question 70

Multiple Choice

According to the concept of the "invisible hand," if Susie opens and operates a profitable childcare center, then

• A)government should regulate the business to ensure quality.
• B)the profit Susie earns indicates that she is overcharging for her services.
• C)she has served society's interests by providing a desired good or service.
• D)this demonstrates that consumer sovereignty is not present in this market.

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Definitions:

Misallocation

The inefficient distribution or use of resources, often leading to suboptimal economic outcomes.

Nominal Gain

The increase in the monetary value of an asset or investment without adjusting for inflation, representing a simple difference in price.

Real Gain

The increase in value or profit after adjusting for inflation or other external factors that affect purchasing power.

Price Level

The overall level of prices of goods and services in an economy at a given time, often measured by a price index.