Externalities cause the market mechanism to allocate goods and resources inefficiently because
a. nonconsenting third parties are generally not hurt by externalities.
b. producers and consumers ignore signals given by the competitive market.
c. prices are always higher than they should be.
d. competitive markets fail to give producers and consumers correct price signals.
D
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
The figure above shows the U.S. demand and U.S. supply curves for cherries. In the absence of international trade, cherry farmers would receive ________ per pound of cherries
A) $2.50 B) $1.50 C) $2.00 D) $1.00 E) $0.50
In the loanable funds market, as the interest rate rises the ________ and the ________
A) quantity of loanable funds supplied increases; quantity of loanable funds demanded decreases B) quantity of loanable funds supplied decreases; quantity of loanable funds demanded increases C) supply of loanable funds increases; demand for loanable funds decreases D) supply of loanable funds decreases; demand for loanable funds increases
Arcadia faced very high levels of unemployment for three consecutive years. This caused social disruptions, riots, and finally the replacement of the government. In this scenario, unemployment has resulted in _____
a. a loss of lifetime earnings b. a loss of human capital c. the deterioration of health d. a loss of social cohesion