(SOLUTION) ECON312N Week 1 Discussion: Scarcity or the Invisible Hand

Required Resources
Read/review the following resources for this activity:

  • Textbook: Chapter 1, 2
  • Lesson
  • Minimum of 1 scholarly source (in addition to the textbook)

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.

Follow-Up Post Instructions

Respond to at least one peer. Respond to a peer who chose the option you did not choose. Further the dialogue by providing more information and clarification.

Writing Requirements

  • Minimum of 2 posts (1 initial & 1 follow-up)
  • Minimum of 2 sources cited (assigned readings/online lessons and an outside scholarly source)
  • APA format for in-text citations and list of references

SOLUTION

As asserted by Evensky (1993). the invisible hand theory is a metaphor that was developed by Adam Smith in 1759, and entails the unseen forces that cause unintended benefits to the free market economy. The metaphor states that the market is in a position to find its balance without influence from government or non-government interventions.

The textbook states that when economists see an economic issue, they go through the theories they know to see if they can find one that fits. Then they use the theory to create insights about the issue. Economists show theories as diagrams, graphs, or mathematical equations. They don’t figure out the answer to the problem first and then draw the graph to illustrate. Instead, they use the graph of the theory to help them figure out the answer. Please click the purchase button to access the entire copy at $5