A market failure occurs when
A) price equals marginal cost.
B) there is a non-optimal allocation that leads to an inefficient market.
C) deadweight loss is maximized.
D) a firm shuts down.
B
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In which of the following monetary aggregates are Treasury Bills included?
A. M1 only B. M2 only C. Both M1 and M2 D. Neither M1 nor M2
Suppose a perfectly competitive firm faces the following cost and revenue conditions: ATC = $25.50; AVC = $20.50; MC = $25.50; MR = $28.50. The firm should
A. shut down. B. continue to produce its current output. C. increase output. D. decrease output.
Assume that the price of labor and capital have remained the same, but that the average educational level of workers has increased and therefore the productivity of labor has increased. This would lead a firm to
A. use only labor to produce the product. B. use a more capital-intensive production technology. C. use a more labor-intensive technology. D. not change its production technology, but to produce fewer units of output.
Refer to the above data. Assume that investment Ig is not affected by the income GDP level. The multiplier for this private open economy is:
All figures in the table below are in billions.
A. 1.25
B. 2.00
C. 2.50
D. 3.33