Which of the following book explained that rational self-interest in a free-market economy leads to economic well being?

The Wealth of Nations

The correct answer is Option (3) → The Wealth of Nations

Adam Smith, through his book  "The Wealth of Nations" attempted to understand the market economy that was just emerging at that time. Smith argued that the market economy is made up of a series of individual exchanges or transactions, which automatically create a functioning and ordered system. This happens even though none of the individuals involved in the millions of transactions had intended to create a system. Each person looks only to her or his own self-interest, but in the pursuit of this self-interest the interests of all – or of society – also seem to be looked after. In this sense, there seems to be some sort of an unseen force at work that converts what is good for each individual into what is good for society. This unseen force was called ‘the invisible hand’ by Adam Smith. Thus, Smith argued that the capitalist economy is driven by individual self-interest, and works best when individual buyers and sellers make rational decisions that serve their own interests.