The "Invisible Hand" Using Adam Smith's Terminology Refers to

question 7

Multiple Choice

The "invisible hand" using Adam Smith's terminology refers to

• A)government control of the market.
• B)market forces working through the price mechanism.
• C)the money supply that serves to keep the economy working smoothly.
• D)the role of innovation in maintaining a steady rate of growth.
• E)"behind-the-scenes" policy making to influence how markets allocate scarce resources.

Distinguish between the roles and powers of different branches of the U.S. government.

Grasp the principles of civil disobedience as advocated by Thoreau.

Recognize the criteria for civil disobedience according to Thoreau.

Differentiate between the powers of interpretation and legislation within the U.S. government.

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Definitions:

Optimal Tax

A tax system designed to achieve the best balance between efficiency and equity.

Marginal Social Benefit

The supplementary gain for society derived from the consumption of one extra unit of a good or service.

Marginal Social Cost

The cost to society of producing an additional unit of a good or service, including both private costs and any externalities.

Marginal Social Benefit

The additional gain to society as a whole from an additional unit of a good or service.