Which statement is true?
A. Externalities and public goods are basic classes of market failure.
B. Externalities, but not public goods, is a basic class of market failure.
C. Public goods, but not externalities, is a basic class of market failure.
D. Neither public goods nor externalities are basic classes of market failure.
A. Externalities and public goods are basic classes of market failure.
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Jen has a PhD in economics and has been working for 3 years part-time as an instructor; she has always hoped to be hired as a full-time faculty member. The best way to describe Jen is to say she is:
A. a discouraged worker. B. unemployed. C. underemployed. D. overemployed.
Isabella wishes to buy gasoline and have her car washed. She finds that if she buys 9 gallons of gasoline at $1.50 per gallon, the car wash costs $1, but if she buys 10 gallons of gasoline, the car wash is free. For Isabella, the marginal cost of the tenth gallon of gasoline is
a. zero. b. 50 cents. c. $1. d. $1.50.
In perfect competition, _____
a. economic profits are eliminated by entry in the long run b. economic profits are eliminated by exit in the long run c. price is greater than marginal cost at the profit-maximizing equilibrium d. the marginal cost curve is perfectly elastic in the long run
Which of the following phenomena shows that risk aversion is the characteristic of many people?
A. Gambling B. Investing in one stock rather than a portfolio C. Auto insurance D. Looting