Each Person Goes About Her Daily Business Seeking to Maximise

question 124

True/False

Each person goes about her daily business seeking to maximise her own self-interests. In doing so, she contributes to the welfare of society at large. This is the idea underlying Adam Smith's 'invisible hand'.

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Definitions:

Kinked Demand Curve

A model used in economic theory that suggests prices have a tendency to remain stable because competitors will more likely match price decreases but not price increases.

Opec

The Organization of Petroleum Exporting Countries, an intergovernmental organization of oil-producing countries that coordinates and unifies petroleum policies.

Oligopoly

A market structure characterized by a small number of large firms that have significant control over market prices and competition.

Game-Theory

A mathematical framework used for analyzing situations in which players make strategic decisions that affect the outcomes of all participants.