Adam Smith's Invisible Hand Only Leads to an Efficient Outcome

question 38

Multiple Choice

Adam Smith's invisible hand only leads to an efficient outcome when

• A)buyers are fully informed about all relevant aspects of a product and the market in which it is traded.
• B)buyers collect information up to the point at which the marginal cost of having more information equals the marginal benefit of having more information.
• C)buyers have more information about the product being traded than do sellers.
• D)buyers have less information about the product being traded than do sellers.

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Definitions:

Cognitive Movement

An approach within psychology that emphasizes understanding how our thought process influences behavior and learning.

Adler

Alfred Adler was an Austrian medical doctor and psychotherapist who founded the school of individual psychology, emphasizing the importance of societal factors in personality development.

Determinant

An element or factor that decisively affects the nature or outcome of something.

Personality Changes

Alterations in an individual's characteristic patterns of thinking, feeling, and behaving, which can be due to various factors including psychological conditions or life experiences.