Quizizz--Economics (Module 4--Element 1.11)--The Invisible Hand

What does the "invisible hand" of market prices refer to according to Adam Smith?

• Government regulations

• Centralized planning

• Price system

• Social welfare programs

According to Adam Smith, what motivates individuals to find the most advantageous employment?

• Altruism

• Self-interest

• Government incentives

• Social pressure

What is the outcome when individuals pursue their own advantage, according to Adam Smith?

• Chaos and disorder

• Centralized control

• Orderly society

• Economic stagnation

What is a common misconception about achieving orderly outcomes in society?

• They require centralized authority

• They happen naturally

• They are driven by individual self-interest

• They are unpredictable

What role do market prices play in coordinating the actions of individuals in a market?

• They provide a technical manual for businesses.

• They reflect consumer preferences and resource supplier choices.

• They eliminate the need for private property.

• They increase the amount of goods that get spoiled.

Why did Friedrich Hayek refer to the market system as a "marvel"?

• Because it requires a detailed manual for operation.

• Because it relies on government intervention.

• Because it uses the market price as a single indicator to coordinate actions.

• Because it eliminates the need for consumer preferences.

What is the "invisible hand" in the context of market prices?

• A manual that businesses follow.

• A government regulation.

• A mechanism that directs self-interested individuals into cooperative action.

• A tool for increasing product prices.

What does the market price of a product reflect?

• The decisions made by a central authority

• The decisions made by millions of people worldwide

• The cost of production only

• The quality of the product

How does the market act for each product or service?

• As a central-planning authority

• As a giant computer network

• As a local trading post

• As a government regulator

What do market prices provide to producers and resource suppliers?

• A reason to ignore consumer needs

• A directive to produce what consumers value most

• A fixed cost of production

• A guarantee of profit