The "Invisible Hand" Refers to

question 50

Multiple Choice

The "invisible hand" refers to

• A)the marketplace guiding the self-interests of market participants into promoting general economic well-being.
• B)the fact that social planners sometimes have to intervene,even in perfectly competitive markets,to make those markets more efficient.
• C)the equality that results from market forces allocating the goods produced in the market.
• D)the automatic maximization of consumer surplus in free markets.

---

Definitions:

Production Function

A mathematical relation that describes the maximum amount of output that can be obtained from a given set of inputs, under certain assumptions.

Labor

The application of human strength and intellect in the fabrication of products and provisions.

Machines

Often represents capital goods in economics, essential for the production process in industries and affecting both the output capacity and efficiency of operations.

Short-Run Total Cost

The sum of all expenses, including both constant and flexible, associated with the production of goods or services over a short period.