An example of a market failure is
A. when not everyone who wants to see a major league football game can.
B. when there is an increase in gasoline demand and a shortage develops.
C. when the market prices of some vehicles are too high for some buyers.
D. a firm is dumping toxic waste that is making people sick.
Answer: D
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Government can step in to make economic decisions that address problems markets create, but government action is also imperfect and may not reflect majority views. What situation can arise in which it would be very difficult to identify which choice the majority of voters approves?
a. Budget trading b. Vote cycling c. Logrolling d. Pork-barrel spending
Nine friends who love the beach decide to pool their financial resources and equally share the cost of a one-week house rental on Nantucket. Suppose that the beach outside of the house becomes more congested when the nine additional people join the other beachgoers. Which of the following statements is not correct?
a. Use of the beach by the nine new beachgoers will yield a negative externality. b. The town can reduce the congestion externality by raising the fee to access the beach. c. An increase in the fee to access the beach could be viewed as a corrective tax on the externality of congestion. d. Each of the nine friends would have been better off staying at home.
What options have been suggested for shoring up the finances of Social Security and Medicare? Why are they unpleasant ones to consider?
What will be an ideal response?
According to the above table, the four-firm concentration ratio of this industry is
A) 69.2 percent. B) 35.1 percent. C) 66.7 percent. D) 67.5 percent.