Any imperfection in the market mechanism that prevents optimal outcomes is known as
A. Market failure.
B. Government failure.
C. Public cost.
D. External cost.
Answer: A
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In the above figure, what is the full-employment real wage rate and quantity of hours per year?
A) $40 and 60 billion hours per year B) $50 and 100 billion hours per year C) $35 and 100 billion hours per year D) $50 and 40 billion hours per year
When negative externalities exist in a market, if the producers are forced to pay a Pigouvian tax then:
A. those who interact in the market will lose surplus. B. those who interact in the market will gain surplus. C. producers will gain surplus. D. those who do not interact in the market but are affected by the externality will lose surplus.
Which of the follow is not a property of the aggregate demand curve?
A. It shows the relationship between the overall price level and the level of total demand. B. It shows the price level on the vertical axis and output on the horizontal axis. C. The aggregate demand curve slopes downward. D. It shows the relationship between the overall price level and level consumption.
When resources are used efficiently, you can produce more of one good, ceteris paribus, only by: a. printing more money
b. charging a lower price for output. c. charging a higher price for output. d. producing less of another good.