Which is an example of a market failure?
A. The price of medical care has risen dramatically as a result of the introduction of sophisticated equipment and techniques.
B. Polio shots and chest x-rays provide widespread benefits to the community as a whole as well as to the individuals who get them.
C. Extensive decreases in the prices of electronic equipment resulted in large numbers of bankruptcies in the computer industry.
D. There are not enough tickets available to concerts of extremely popular performers.
Answer: B
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If a government decides to move from a regressive tax system to a progressive tax system, there will be a(n) ________ in equity and a(n) ________ in efficiency
A) increase; increase B) decrease; decrease C) increase; decrease D) decrease; increase
In the 1960s, many economists and policy makers considered the trade-off between inflation and unemployment revealed in the Phillips curve to be permanent
This belief was challenged by ________, who argued that there is no trade-off between inflation and unemployment and the long run. A) Paul Samuelson and James Tobin B) Robert Lucas and Thomas Sargent C) Finn Kydland and Edward Prescott D) Milton Friedman and Edmund Phelps
If two goods both had positive cross elasticities and positive income elasticities,
a. they are both normal and substitutes for one another. b. they are both normal and complements for one another. c. they are both inferior and substitutes for one another. d. they are both inferior and complements for one another.
When economists say an activity is consistent with economic efficiency, they mean
a. a majority of citizens favor the activity. b. the benefits that result from the activity exceed the costs. c. the number of people who gain from the activity exceeds the number on whom costs are imposed. d. the costs that result from the activity exceed the benefits.