Which of the following is not a market failure?
a. A lack of competition in some markets.
b. Prices determined in competitive markets, which consumers, as individuals, have no control over.
c. The presence of externalities in some markets.
d. A lack of public goods desired by a majority of citizens.
e. Income inequality.
b
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The demand for money that arises because holding money over short periods is less risky than holding stocks or bonds is called the
A) transactions demand for money. B) opportunity cost demand for money. C) liquidity demand for money. D) speculative demand for money.
Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
Power plants with the lowest operating costs tend to:
A. have the lowest fixed costs in terms of construction. B. have the highest fixed costs in terms of construction. C. operate on the smallest scale of energy production. D. generate the cleanest energy.
Southwest Airlines wants to raise $20 million to finance the renovation of their corporate offices, and the company wishes to raise the funds through direct finance. Which of the following methods could it use?
A) It could issue $20 million in stocks. B) It could sell $20 million in bonds. C) It could borrow $20 million from a bank. D) It could choose either A or B.