Detrimental externalities like pollution are a shortcoming of the market mechanism. Do they occur in free market economies alone? Explain with examples.
What will be an ideal response?
Even though the detrimental externalities are the shortcoming of market economies, free-market economies do not have any monopoly over this. Even some centrally planned economies like China and former Soviet Union have many environmental disasters. China has some of the world’s worst air pollution. Grave environmental problems also continue to plague Eastern Europe and the countries of the former Soviet Union.
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Miniville is an isolated town located on the southern shore of Lake Condescending, a very large lake. The western edge of Miniville is adjacent to impassable mountains and there are no towns or businesses for many miles to the east. The 300 residents of Miniville are evenly distributed along 3 miles of shoreline on the lake, east of the mountains. Lake Shore Drive, the only street in town, provides access to Miniville's homes and businesses. All residents live between the lake and the street; businesses locate on the other side of the street. Lake Shore Drive is 3 miles long, and the points labeled A, B, and C are 1, 2, and 3 miles from the western end of Lake Shore Drive, respectively. All residents of Miniville shop at the store located closest to their homes. src="https://sciemce.com/media/4/ppg__rrr0818190951__f1q215g1.jpg" alt="" style="vertical-align: 0.0px;" height="117" width="538" />________ residents of Miniville live west of point B, and ________ live east of point A.
A. 150; 150
B. 100; 200
C. 200; 100
D. 200; 200
Robert Lucas and his followers have argued that the Philips curve appears to be:
a. a vertical line. b. a horizontal line. c. a negatively-sloped curve. d. a positively-sloped curve.
The law of diminishing marginal utility states that total utility must eventually diminish in the consumption of any good or service
Indicate whether the statement is true or false
A price elasticity of demand of 5 means that for every 1 percent change in price, the quantity demanded will change in the opposite direction by 5 percent
a. True b. False Indicate whether the statement is true or false