To what extent does the invisible hand model of a market ensure equity and efficiency?
A) The invisible hand always ensures both equity and efficiency.
B) The invisible hand cannot ensure either equity or efficiency.
C) The invisible hand is more effective at ensuring efficiency than it is at ensuring equity.
D) The invisible hand is more effective at ensuring equity than it is at ensuring efficiency.

Question

Quizplus · Accepted Answer

The invisible hand model of a market is based on the idea that individuals acting in their own self-interest will lead to an efficient allocation of resources. However, this model does not guarantee fairness or equity in the distribution of resources. In fact, the pursuit of self-interest can lead to inequality and market failures, such as monopolies or externalities. Therefore, while the invisible hand can ensure efficiency, it is not effective at ensuring equity.

To What Extent Does the Invisible Hand Model of a Market