If the buyers and sellers in each market take their decisions following only their own self-interest, there is no need to study the economy as a whole separately. But economists found that they had to look further. Which of the following can be the reason?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → All of the above
Economists found three reasons to look beyond self-interest in markets: markets may not exist, they may fail to reach equilibrium, and society may choose to pursue social goals.
Each of options (1), (2) and (3) is a correct statement, but it is only one of the correct points, so on its own it is not the answer.
NCERT (2026-27): “Introduction … But economists gradually discovered that they had to look further. Economists found that first, in some cases, the markets did not or could not exist. Secondly, in some other cases, the markets existed but failed to produce equilibrium of demand and supply. Thirdly, and most importantly, in a large number of situations society (or the State, or the people as a whole) had decided to pursue certain important social goals unselfishly (in areas like employment, administration, defence, education and health) for which some of the aggregate effects of the microeconomic decisions made by the individual economic agents needed to be modified. …” |