**Question 1:**What does Adam Smith's idea of an "invisible hand" represent? *- The way the markets coordinate trade.- The economic role of governments.- A power that superheroes possess.- The concern of people for one another.**Question 2:**Which of the following is characteristic of a traditional economy? *- Communities tend to be fast-growing.

Answered: What does Adam Smith's idea of an…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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In economics the Adam Smith's idea of an invisible hand invisible hand is based on the foundational concept on the theory on rational choice that states that individuals will make decisions based on their own personal benefits and self-interest. The unseen market force that causes equilibrium in free market with levels of supply and demand is due to the actions of self-interested individuals.

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