Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Don’t understand
![Amani Medina 12/8/21
What is self-interest? What is the “invisible hand?"
Adam Smith believed that individuals should be free to pursue their own economic self-interest
[things that will bring you personal gain or benefit]. Through pursuing their own self-interest, Smith
believed that all of society would benefit. Smith argued that people would make things that feed
their self-interests of increasing their wealth and profit such as a coat maker who makes coats.
Even though he is making coats out of self-interest or a selfish desire for profit, Smith argued that
this would still benefit the rest of society because people need coats and are willing to pay_for
them. Smith believed an economy like this should work smoothly and efficiently without any
government interference, as if guided and organized by an invisible hand. The invisible hand is a
metaphor for a şelf-regulating economy where people get what they need by pursuing their own
self-interests.
1. According to Adam Smith, how does allowing people to freely pursue their self-interest benefit
society?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8f1ddc42-76b9-4f90-a0eb-9e6d40a705c3%2F1eceb4ca-749e-43b7-b3db-e78c46070534%2Fcz32jg_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Amani Medina 12/8/21
What is self-interest? What is the “invisible hand?"
Adam Smith believed that individuals should be free to pursue their own economic self-interest
[things that will bring you personal gain or benefit]. Through pursuing their own self-interest, Smith
believed that all of society would benefit. Smith argued that people would make things that feed
their self-interests of increasing their wealth and profit such as a coat maker who makes coats.
Even though he is making coats out of self-interest or a selfish desire for profit, Smith argued that
this would still benefit the rest of society because people need coats and are willing to pay_for
them. Smith believed an economy like this should work smoothly and efficiently without any
government interference, as if guided and organized by an invisible hand. The invisible hand is a
metaphor for a şelf-regulating economy where people get what they need by pursuing their own
self-interests.
1. According to Adam Smith, how does allowing people to freely pursue their self-interest benefit
society?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education