COURSE

ECON312N: Principles of Economics

Scarcity or the Invisible Hand

Introduction
Select and respond to one of the following options:

• Option 1: What assumptions about the economy must be true for the invisible hand to work? To what extent are those assumptions valid in the real world? Do these conditions hold in the social service industries?
• Option 2: As illustrated in the text, society must make trade-offs in terms of what society produces. Examine these trade-offs in the context of the production possibilities frontier. Use a social service industry such as healthcare as an example. Make sure to address productive efficiency, allocative efficiency, and opportunity costs.

SOLUTION

Professor and class,

The Invisible Hand in Economics

The invisible hand in economics refers to an unobservable force in the market that assists the supply and demand of goods to reach an equilibrium position automatically. The phrase ‘invisible hand was coined by Adam Smith where he assumed that an economy offers market scenarios where everyone can freely work well in a said market with their interest. He did explain that the economy will automatically perform well if the government leaves its citizens to………..please click the icon below to access entire solution at $5