When organizing a collective action, it is generally true that the larger the group the:
A. higher the costs and benefits per person.
B. lower the costs and benefits per person.
C. higher the costs and lower the benefits per person.
D. lower the costs and higher the benefits per person.
Answer: C
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Many economists argue that there is imperfect information in the market and that this is a failure of the market mechanism
a. True b. False Indicate whether the statement is true or false
Suppose Jack just booked a ticket to fly home to see his family for Thanksgiving. When he purchases the ticket, he decides to purchase travel insurance that allows him to get a full refund on his ticket if he's too sick to travel. Knowing this, Jack doesn't bother to take care of himself in the weeks leading up to the trip, reasoning that if he ends up being too sick to travel, then he can always get a full refund. Jack's failure to take care of himself in the weeks leading up to his trip is an example of:
A. a positional externality. B. the lemons model. C. moral hazard. D. adverse selection.
Answer the following statement(s) true (T) or false (F)
1. Unsolicited emails are a major positive externality. 2. Negative externalities lead to overproduction. 3. Firms do not shoulder the full cost of their actions if there is a negative externality. 4. Positive externalities result in efficient output levels. 5. Pollution has no benefits.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, Point E necessarily represents
A. only motorcycles being produced. B. overallocation of resources. C. an impossible production point. D. technological advancement.