Market failure
A. Occurs whenever the government pursues laissez-faire policies.
B. Occurs whenever the government intervenes in the market mechanism.
C. Occurs whenever an imperfection in the market mechanism prevents optimal outcomes.
D. Never occurs.
Answer: C
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In the above figure, if D2 is the original demand curve and the price of a substitute in consumption rises, which price and quantity might result?
A) point a, with price P2 and quantity Q2 B) point b, with price P1 and quantity Q1 C) point c, with price P3 and quantity Q3 D) point d, with price P1 and quantity Q3
Suppose your friends take you out for dinner on your birthday and you have a much better time than you would have had doing anything else. There is still an opportunity cost, even though they will not let you pay for anything
a. True b. False
If you buy a gift without knowing what a person really wants or needs, you have demonstrated:
A. the incentive problem of gift-giving. B. the necessity-identification problem of gift-giving. C. the knowledge problem of gift-giving. D. the negative trade problem of gift-giving.
Compared to the perfectly competitive firm, the monopolist's input demand curve is
A) more elastic. B) more inelastic. C) due to a constant per-unit price of the product. D) marginal factor cost.