The Idea That Markets Work Efficiently

question 235

Multiple Choice

The idea that markets work efficiently:

• A) refers to the fact that self-interest can be aligned with social interest.
• B) means that trade-offs can be reduced by channeling greed toward good ends.
• C) suggests that there is never any need for government regulation, taxes, or subsidies.
• D) has been known for many centuries.

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Definitions:

Marginal Subcontracting Cost

The additional cost incurred for each unit of production outsourced to a third party, rather than produced in-house.

Layoff Cost

The financial impact associated with reducing a company's workforce, including severance pay, unemployment benefits, and potential legal costs.

Hiring And Training Cost

Expenses associated with recruiting new employees and providing them with the necessary training to perform their job.

Labor Hours

The total number of hours worked by employees during a certain period, often used to measure productivity.