Individuals’ pursuit of their self-interest delivers optimal economic outcomes, whereas government intervention tends to worsen outcomes.

Question

BlackTom AI · Accepted Answer

This question presents a statement linking individuals pursuing self-interest to optimal economic outcomes and suggests government intervention worsens outcomes. In typical economic theory, orthodox liberalism (classical liberalism or laissez-faire liberalism) argues that free markets, driven by individuals pursuing their own interests, lead to efficient allocations of resources via the price mechanism and voluntary exchange. The idea is that competition, private property, and limited government yield the best overall welfare, while interventions can create distortions, reduce incentives, or impede the automatic adjustments of supply and demand.

However, the options list is missing in this item, so we cannot examine each alternative choice as the prompt would normally require. With no other options provided, we cannot critique specific incorrect statements or contrast them against the given correct option.

If we consider what typical competing views might be, we could imagine potential incorrect choices such as: (a) Keynesian or demand-management perspectives asserting government intervention can stabilize economies and improve welfare during downturns; (b) socialist or command-economy views claiming central planning yields better outcomes by allocating resources according to social welfare; (c) mercantilist or protectionist views arguing that government policies maximize national wealth through trade barriers and state control of markets. Each of these would generally be inconsistent with orthodox liberalism’s core claim that free markets deliver superior outcomes in many standard scenarios, though proponents may acknowledge contexts where intervention has benefits (e.g., public goods, externalities, market failures).

In summary, given the intended answer is Orthodox liberalism, the explanation rests on the core principle that self-interested individuals in competitive markets coordinate economic activity efficiently with limited government involvement, whereas many alternative frameworks advocate for varying degrees of intervention to address market failures or social goals. The absence of provided answer options prevents a line-by-line critique of each incorrect statement.

AS.470.605.51.SP25 M04: Quiz

Individuals’ pursuit of their self-interest delivers optimal economic outcomes, whereas government intervention tends to worsen outcomes.

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