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:

Remedy at Law

Legal means to enforce a right or compensate for a violation, including monetary damages or specific performance.

Third-Party Beneficiaries

Individuals who are not directly involved in a contract but stand to benefit from it as stipulated by the contracting parties.

Seller's Warranties

Guarantees made by a seller regarding the condition, functionality, or quality of goods or services.

Liquidated Damages

Damages specified as a term of the contract, before a breach of contract occurs.