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:

Political Economy

The interactions of politics, government and governing, and the social and cultural constitution of markets, institutions, and actors.

State Apparatus

Structures and institutions through which a state exercises its power and authority, including the government, military, police, and judicial systems.

Capitalism

Capitalism is an economic system characterized by private ownership of the means of production, where profits are generated through the operation of competitive markets.

Private Ownership

The legal right of individuals or entities to own property and assets independently of the government or communal entities.