Adam Smith claimed that an efficient allocation of resources was the by-product of
A) random error.
B) selfish interests of sellers pursuing profit.
C) well-intentioned government regulation.
D) selfish interests of buyers pursuing pleasure.
E) the involvement of self-interested sellers seeking profits with self-interested buyers seeking pleasure.

Question

Quizplus · Accepted Answer

Adam Smith believed that when self-interested sellers seek profits and self-interested buyers seek pleasure, an efficient allocation of resources is the by-product. This is because sellers will produce goods that buyers want and are willing to pay for, and buyers will only purchase goods that they believe will bring them value or pleasure. This creates a system of supply and demand that naturally allocates resources efficiently without the need for government intervention or regulation.

Adam Smith Claimed That an Efficient Allocation of Resources Was