If market signals result in pollution beyond the optimal level, then
A. The economy experiences government failure.
B. The government is allocating resources inefficiently.
C. The market mechanism has failed to achieve efficiency.
D. A laissez faire approach will reduce the level of pollution.
Answer: C
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A game in which the players explicitly coordinate their decisions to make themselves better off is a
A) cooperative game. B) noncooperative game. C) zero-sum game. D) negative-sum game.
If, at the current price, there is a shortage of a good, then a. sellers are producing more than buyers wish to buy. b. the market must be in equilibrium
c. the price is below the equilibrium price. d. quantity demanded equals quantity supplied.
The life cycle effect characterizes a lifetime income profile in which income
a. tends to follow a seasonal pattern. b. rises as a worker gains maturity and experience. c. rises and falls in conjunction with the business cycle. d. falls during the early years of market activity and peaks at retirement.
Which of the following is correct as it relates to cost curves?
A. Marginal cost intersects average fixed cost at the latter's minimum point. B. Average fixed cost intersects marginal cost at the latter's minimum point. C. Marginal cost intersects average total cost at the latter's minimum point. D. Average variable cost intersects marginal cost at the latter's minimum point.