Market failure occurs when
A. the price system fails to generate an efficient allocation of resources.
B. the price system allows consumers to make their own decisions.
C. the price system fails to generate an equal distribution of wealth.
D. the price system fails to generate an equal distribution of income.
Answer: A
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The marginal benefit of a taco is measured by
A) the price of the taco. B) the amount of another good a person is willing to give up to get one more taco. C) the amount of another good a person must give up to get one more taco. D) a point on the PPF. E) the opportunity cost of producing another taco.
In the short run in the Keynesian model, a sharp decline in oil prices would leave the economy with a ________ level of output and a ________ real interest rate
A) higher; lower B) lower; higher C) lower; lower D) higher; higher
When price was 10, quantity demanded was 50. When price decreased to 8, quantity demanded increased to 60. Therefore, when price decreased, total revenue
A. decreased from 500 to 480, indicating that demand is inelastic. B. decreased from 500 to 480, indicating that demand is elastic. C. increased from 480 to 500, indicating that demand is inelastic. D. increased from 480 to 500, indicating that demand is elastic.
Refer to Figure d, which illustrates a game played by Travis and Darren. What is the Nash equilibrium?
A. Travis chooses North, Darren chooses East
B. Travis chooses North, Darren chooses West
C. Travis chooses South, Darren chooses East
D. Travis chooses South, Darren chooses West