Some would cite the purchase of defective products and the rising cost of health care as market failures. Argue that these are not true market failures.
What will be an ideal response?
If one had perfect information, one would never willingly purchase a defective product. In actuality, information is a scarce good, and one should obtain an optimal amount, which will fall short of perfect information. Occasionally, one will purchase a toy that doesn’t work properly or a car that leaves something to be desired. Insurance, money-back guarantees, and the like are there (at a price) to reduce the risk of the unknown.Health care suffers from the cost disease of the service industries, whereby labor-intensive products are less able to take advantage of technological advances. Their costs rise faster than product prices in general. (That is not to say that medical monopolies do not contribute to high health costs.)
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Refer to the above table. What does total product equal when 4 units of labor are used?
A) 1328 B) 332 C) 320 D) 960.
Is the $208 million that electricity producers will spend to comply with the new rules part of the opportunity cost of producing electricity?
What will be an ideal response?
Which of the following workers is most likely to be asked to post a performance bond?
A) construction contractor B) fast food worker C) economics professor D) book author
To pay interest to those U.S. residents who hold government bonds, the government must tax other U.S. residents, implying that the more we redistribute income among residents to cover interest payments, the higher the average tax rate will have to be
a. True b. False