The 'invisible hand' refers to the notion that
A) marginal benefit decreases as more is consumed.
B) no matter what allocation method is used, the resulting production is efficient.
C) competitive markets send resources to their highest-valued uses.
D) marginal cost increases as more is produced.
E) government intervention is necessary to ensure efficiency.

Question

Quizplus · Accepted Answer

The concept of the 'invisible hand' is attributed to Adam Smith and refers to the idea that in a competitive market, individuals pursuing their own self-interest will unintentionally promote the greater good of society. This is because the market allocates resources efficiently, sending them to their highest-valued use through the interaction of supply and demand. Therefore, choice C is the best answer.

The 'Invisible Hand' Refers to the Notion That