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:

Stock Certificate

A document that serves as a stockholder’s proof of ownership in a corporation.

Negotiable Instrument

A written document signed by a person who makes an unconditional promise to pay a specific sum of money on demand or at a certain time to the holder of the instrument; an acceptable medium for exchanging value from one person to another.

Criminally Liable

The state of being legally responsible for the commission of a crime, subjecting the individual to criminal prosecution and penalties.

Corporate Officer

An executive or manager who holds a position of authority in a corporation, typically appointed by the board of directors.