Explain why a government may select an inefficient allocation
What will be an ideal response?
A government may decide the equity of an allocation makes it preferable to all possible efficient allocations.
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The desired reserve ratio helps determine the amount of money banks can create
Indicate whether the statement is true or false
Which of the following best describes efficiency in the demand and supply model?
a. The economy is receiving as much benefit as possible from its scarce resources and all the possible gains from trade have been achieved. b. The economy is receiving as much benefit as possible from its scarce resources but not achieving all the possible gains from trade. c. The economy is not receiving as much benefit as possible from its scarce resources but is getting all the possible gains from trade. d. The economy is not receiving as much benefit as possible from its scarce resources and not achieving all the possible gains from trade.
If the current €/$ exchange rate is at parity, then the Euro price of a Hollister hoody costing US$125 is:
(a) €155; (b) €165; (c) €125; (d) We need more information to calculate the Euro price.
What is the definition of an oligopoly?
a) one firm producing 95 percent of the output b) two to four firms producing 70 percent to 80 percent of the output c) eight to ten firms producing 60 percent to 70 percent of the output d) eight to ten firms producing 90 percent of the output