Asked by Hannah Crenshaw on Apr 26, 2024
Verified
Does the phenomenon of externalities strengthen the argument that we should rely upon the "invisible hand" of the marketplace, or does it weaken that argument?
Externalities
Financial outcomes or repercussions that impact third parties who are not directly involved; these can be positive or negative.
Invisible Hand
A term coined by Adam Smith to describe the self-regulating nature of the marketplace in adjusting supply and demand autonomously.
Marketplace
A physical or digital venue where buyers and sellers come together to exchange goods, services, or information.
- Evaluate the effects of externalities on the efficiency of the market outcomes.
Verified Answer
Learning Objectives
- Evaluate the effects of externalities on the efficiency of the market outcomes.
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