WEEK 1 RWM Article 1.2: \"Shaking the Invisible Hand: The Uncertain Foundation o
ID: 1136866 • Letter: W
Question
WEEK 1 RWM Article 1.2: "Shaking the Invisible Hand: The Uncertain Foundation of Free Market Economics 1. Using the same critical thinking presented in RWM 1.2 Shaking the Invisible Hand: The Uncertain Foundation of Free Market Economics, describe "the invisible hand" of the market. Next, discuss whether the invisible hand always works to generate the "best" economic outcome. Finally, summarize two assumptions of free markets and give an example of a real-life market, business, or transaction that violates each of these assumptions. (Note: It is ok to use a different example for each assumption.) WEEK2 RWM Article 2.5: "The Airfare Mystery 2. A cup of coffee inside the Denver airport often costs significantly more than an identical cup at the gas station just outside the airport. Using similar critical thinking as that presented in RWM 2.5 The Airfare Mystery, discuss the potential influences impacting supply and demand for a cup of coffee in this situation. Be sure to "delve deeper" and discuss at least 2 impacts on the supply side and 2 impacts on the demand side that could help explain this difference in market prices for a cup of coffee WEEK 3 RWM Article 3.1: "The 800-Pound Ronald McDonald in the Room 3. Describe the criterion rational consumers use in deciding what product to purchase next to maximize their utility. What two pieces of information must a consumer know to be able to accurately act on this criterion? Using similar critical thinking as that presented in RWM 3.1 The 800-Pound Ronald McDonald in the Room, give an example in which advertisements can (1) Help consumers maximize their utility and (2) Hurt a consumer's ability to maximize utility. Be sure to explain your answers in detail. Why might advertising aimed at children be especially harmful? WEEK 4 RWM Article 2.1: "Price Gouging: It's Just Supply and Demand" 4. Gas stations off of I-25 dramatically increased their prices during the solar eclipse in August of 2017, giving rise to complaints of "price gouging". Using the same critical thinking presented in RWM 2.1 Price Gouging: It's Just Supply and Demand, what are the supply and/or demand changes that caused this high price for gas during the eclipse? Why would the short-run price elasticity be lower than the long-run for gas in this case? Is price gouging fair?Explanation / Answer
1) INVISIBLE HAND OF THE MARKET :
Invisible hand is a concept given by Adam Smith to discribe the working of capitalist market or capitalist economic system. He used this concept to describe the great social benifits of an individual who acts according to his self intrest.''INVISIBLE HAND'' is actually a phrase used for how, in a free market economy, the overall benifits of a society at a whole is gained because of self intrested individuals operate through a system of mutual interdependence.
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