63. The invisible hand refers to the: A. fact that the U.S. tax system redistributes income from rich to poor. B. notion that, under competition, decisions motivated by self-interest promote the social interest. C. tendency of monopolistic sellers to raise prices above competitive levels. D. fact that government controls the functioning of the market system.
63.
The invisible
hand refers to the:
A.
fact that the U.S. tax system redistributes income from rich
to poor.
B.
notion that, under competition, decisions motivated by
self-interest promote the social interest.
C.
tendency of monopolistic sellers to raise prices above
competitive levels.
D.
fact that government controls the functioning of the market
system.
64.
The invisible
hand concept suggests that:
A.
market failures imply the need for a national economic plan.
B.
big businesses are inherently more efficient than small
businesses.
C.
the competitiveness of a capitalistic market economy
invariably diminishes over time.
D.
assuming competition, private and public interests will
coincide.
65.
Two major
virtues of the market system are that it:
A.
B.
results in an equitable personal distribution of income and
always maintains full employment.
C.
results in price level stability and a fair personal
distribution of income.
D.
eliminates discrimination and minimizes environmental pollution.
66.
The market
system:
A.
produces considerable inefficiency in the use of scarce
resources.
B.
effectively harnesses the incentives of workers and
entrepreneurs.
C.
is not consistent with freedom of choice in the long run.
D.
has slowly lost ground to emerging command systems.
67.
According to
the concept of the “invisible hand,” if Susie opens and operates a
profitable childcare center, then:
A.
government should regulate the business to ensure quality.
B.
the profit Susie earns indicates that she is overcharging for
her services.
C.
she has served society’s interests by providing a desired good
or service.
D.
this demonstrates that consumer sovereignty is not present in
this market.
68.
The invisible
hand promotes society’s interests because:
A.
individuals pursuing their self-interest will try to produce
goods and services that people in society want and are willing to purchase.
B.
individuals will produce goods for others out of concern for their
fellow human beings.
C.
it makes sure that everyone wins from competition in the
market.
D.
government regulation pushes business into producing the right
mix of goods and services.
69.
The
coordination problem in the centrally planned economies refers to the idea
that:
A.
planners had to direct required inputs to each enterprise.
B.
the price level and the level of employment were inversely
related.
C.
the immediate effect of more investment was less consumption.
D.
exports had to be equal to imports for a central plan to work.
70.
“Under
central planning, some group has to decide how to get the necessary inputs
produced in the right amounts and delivered to the right places at the right
time. This is a nearly impossible task without markets and profits.”
This quotation best identifies the:
A.
incentive problem under central planning.
B.
coordination problem under central planning.
C.
self-sufficiency dilemma under communism.
D.
resource overcommitment problem under communism.
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