Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506893
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 6, Problem 10CQ
To determine
Explain the statement of ‘economic function turned over to the government replaces personal self – interest’.
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Students have asked these similar questions
Do different societies require different amounts of societal resources? Explain your answer and provide an example.
Based upon those notions of self-interest and public interest and the bringing of both into harmony, according to Adam Smith, how would a market economy accomplish that harmony about which he describes? What is government's place in that market economy?
What about incentives as opposed to free offerings? What about trade?
In order to satisfy as many wants as possible, a society must achieve productive efficiency:
Because otherwise output might go to where it is less valued.
Because producing more of one thing also leads to producing more of another.
Because producing efficiently leads to maximum production.
Chapter 6 Solutions
Microeconomics: Private and Public Choice (MindTap Course List)
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- According to the invisible hand concept, the best way for a society to encourage the creation of jobs and the production of the products most wanted by consumers would be to: A) Permit government owned industries, such as telecommunications, transportation, and energy, and operate these firms as nonprofit organizations. B) Allow private ownership of businesses, but make use of extensive regulation to force businesses to behave in a socially desirable way. C) Allow entrepreneurs personal freedom to follow their own self-interest. D) Impose high taxes on individuals, and use the revenue to subsidize businesses to encourage them to produce the maximum rate of output.arrow_forwardBased upon those notions of self-interest and public interest and the bringing of both into harmony, according to Adam Smith, how would a market economy accomplish that harmony about which he describes? What is government's place in that market economy?arrow_forwardIn your own words, explain the concept of the “invisible hand” as it relates to economic theory. Why is it that an entrepreneur with seemingly selfish motives can create benefits for the larger society? Why is this a benefit that arises from capitalism and not from other economic systems?arrow_forward
- How do you think a centrally planned economy versus a market economy would perform under each measure of efficiency?arrow_forwardwhat are the three institution of government that protect individuals right in a market economy, explain their functionsarrow_forwardOn the basis of your observations, which factors of production are scarce in your community? Give examples of each. Explain why societies can or cannot satisfy all the wants of its people. Explain your answer and provide an example. Do different societies require different amounts of societal resources? Explain your answer and provide an example.arrow_forward
- How can looting of Shops undermine the capitalistic economic system in the private ownership of the factors of production?arrow_forwardWhy is private property and competition are the most important to a capitalist economy? Support your answer.arrow_forwardCapitalism is a market-driven economy, characterized by government ownership of resources, and profits that are shared equally among the populace. True or false?arrow_forward
- How does self-interest help achieve society’s economic goals? Why is there such a wide variety of desired goods and services in a market system? In what way are entrepreneurs and businesses at the helm of the economy but commanded by consumers?arrow_forwardTraditional economy is the social and institutional process through which certain groups of economic and political elites influence the allocation of scarce productive resources. True or false?arrow_forwardWhy is Private Property and Competition are the most important to a capitalist economy?arrow_forward
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