One way a government can eliminate a market failure
A) is to regulate the price so that it equals marginal cost.
B) is to implement a price floor equal to marginal cost.
C) is to regulate the price so that it is below average cost.
D) None of the above solutions will eliminate a market failure.
A
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Suppose that the market demand curve is 
and the market supply curve is 
.
a. Calculate the equilibrium price and output level.
b. Suppose a price floor of 16 is imposed in this market. What is the new equilibrium quantity transacted in the market?
c. How does the price that firms receive -- net any additional marginal effort costs they incur -- compare to the price consumers pay? d. What is the total cost of the additional effort firms have to exert in equilibrium? What will be an ideal response?
Consider two individuals, Wendy and Jenny, who discount delayed utilities with a weight of 1/4 and 7/8, respectively. Consuming one hamburger gives both Wendy and Jenny benefits worth 16 utils instantly and has delayed costs of 20 utils
a) If the nearby hamburger shop is closed for a week, comment on whether both individuals will consume hamburgers after a week. b) If a new shop is opened nearby, and hamburgers are available for consumption today, comment on whether both individuals will consume hamburgers.
When bank loan officers screen loan applicants to eliminate potentially bad risks, they are attempting to mitigate the problem of
A) adverse selection. B) moral hazard. C) interest rate risk. D) illiquidity.
____ completely deplete the most vital resources
a. We are not going to b. In the near future we will c. We are eventually going to d. We have already begun to