Why Is the Image of the "Invisible Hand" in Adam

question 12

Multiple Choice

Why is the image of the "invisible hand" in Adam Smith's analysis of capitalism said to be misleading?

• A) For markets to function properly, rules must be enforced by the state when violated.
• B) For markets to function properly, entrepreneurs must be admitted by lottery drawing.
• C) For markets to function properly, competition must be enforced by contractual exchanges.
• D) For markets to function properly, contractual exchanges must be enforced by historical precedents.

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Definitions:

Warlike

Having or showing a propensity for conflict or warfare; aggressive and militant in nature.

Minimal Intergroup

A concept in social psychology examining the minimal conditions required for discrimination to occur between groups.

Paradigm

A distinct set of concepts or thought patterns, including theories, research methods, postulates, and standards for what constitutes legitimate contributions to a field.

Inevitability

The quality of being certain to happen; an unavoidable event or outcome.