An example of a market failure is when:
A. a firm selling a product faces competition from many other sellers.
B. a good is priced too high for poor families to afford.
C. the distribution of surplus is unfair.
D. one person's consumption of a good imposes costs on others
Answer: D
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The main reason that finished goods are scarce is that
A. raw material resources are scarce. B. factories are not operated efficiently. C. distribution systems are clogged. D. taxes are destroying work incentives. E. All of the responses are correct.
A surplus will tend to occur at which price in Figure 4-21?
A. P1 B. P2 C. P3 D. There will be no surplus at the prices shown.
Suppose Florida issues an alligator hunting permit to Jackson, who values an alligator hunt at $2,500, instead of Oliver, who values an alligator hunt at $4,000, and alligator hunting permits are allowed to be bought and sold in a secondary market
If Jackson and Oliver agree on a price for Jackson to transfer the permit to Oliver, society would capture ________ cooperative surplus. A) an additional $1,500 of B) no additional C) an additional $6,500 of D) The additional cooperative surplus captured by society would depend on the negotiated price of the permit.
A shift in demand toward the foreign country's goods would ________ the domestic real interest rate and ________ net desired saving (desired saving less desired investment) in the economy
A) lower; increase B) lower; decrease C) raise; increase D) raise; decrease