Market failure is the situation in which a market delivers an inefficient outcome
Indicate whether the statement is true or false
TRUE
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Do people's incomes result from the choices they make?
A) Yes, and from no constraints whatsoever. B) Yes, but from among a limited set of options. C) No, because obviously no one would choose to be poor. D) No, because others often will not let people have what they choose.
Which of the following examples shows the most elastic demand?
a. When the price of gasoline increases from $2.50 to $2.75 per gallon, sales remain the same. b. When the price of stoves increases from $700 to $800 per stove, sales decrease by half. c. When the price of apples decreases from $2 to $1 per pound, sales increase 10 percent. d. When the price of cell phones decreases from $100 to $80 per phone, sales triple.
In a competitive market, the market demand is Qd = 60 - 6P and the market supply is Qs = 4P. A price ceiling of $3 will result in a
A. shortage of 15 units. B. surplus of 30 units. C. surplus of 12 units. D. shortage of 30 units.
Current buyers' and sellers' behaviors are correctly expressed by
A. Multiple sets of aggregate supply and demand curves. B. Many sets of aggregate supply and demand curves. C. One set of aggregate supply and demand curves. D. None of the choices are correct.