Adam Smith used the metaphor of the invisible hand to explain how:
A) markets mismatch buyers and sellers.
B) the butcher and the baker are benevolent.
C) people acting in their own self-interest promote the interest of society as a whole.
D) the production possibilities frontier illustrates efficient outcomes.
C Invisible hand is Adam Smith's descriptor for a market. Markets work well with perfect competition, yet as we will see this is not always the case, i.e., few buyers and/or sellers, externalities, etc. Much more on this to come.