ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The invisible hand is a metaphor for how, in a free market economy, self-interested individuals operate through a system of mutual interdependence. This interdependence incentivizes producers to make what is socially necessary, even though they may care only about their own well-being.

Detailed explanation-2: -The Invisible Hand of the market creates predictable economic systems such as supply and demand, because humans are relatively predictable in their behavior. For example, you predict that when you go to the supermarket there will be eggs and milk for sale.

Detailed explanation-3: -The two assumptions are-1. Every individual must be selfish in nature and collectively this leads to the greater good for society, 2. Every individual must have complete information of the goods or services they are consuming.

Detailed explanation-4: -And, while we learn how the pencil is produced by sandwiching a graphite tube between two wooden slates, the pencil forgets to mention its invention and patenting by Nicolas Conte in the late 18th century. The patent system is a temporary government-created monopoly, and a classic example of the mixed economy[2].