4

Set 5: Cross-Text Connections

Explanation

Answer: A

PASSAGE

Text 1 The 'Invisible Hand,' a concept by Adam Smith, suggests that individuals acting in their own self-interest unintentionally promote the public good through market mechanisms. Text 2 Market failures, such as externalities (pollution) and monopolies, demonstrate the limits of the Invisible Hand. In these cases, self-interest leads to social harm, necessitating government intervention to correct the market.

Which choice best describes the limitation of the concept in Text 1 as presented in Text 2?

A. Unregulated self-interest does not always align with the public good, specifically in cases of market failure.✓ Correct
B. Markets never work.
C. The government should run everything.
D. Pollution is good for the economy.

Detailed Explanation

Text 1: Self-interest = Public good. Text 2: Market failure (Pollution) -> Harm. Limitation: Not always true.

Key Evidence:

• "demonstrate the limits"

• "self-interest leads to social harm"

Why others are wrong: B (Limits.), C (Intervention required in failure.), D (Social harm.).

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