Market failure occurs when
a. all Pareto improvements are undertaken
b. refusal to make a side payment reduces Pareto efficiency
c. the economy operates above the production possibilities frontier
d. markets are perfectly competitive
e. some Pareto improvements are not made
E
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Each citizen in Nexus City has to pay $20,000 as income tax. This is an example of a ________
A) proportional income tax B) progressive income tax C) lump-sum tax D) regressive income tax
Net domestic product (NDP) is
A. Gross Domestic Product (GDP) minus private investment. B. Gross Domestic Product (GDP) minus government transfers. C. Gross Domestic Product (GDP) minus the foreign sector. D. Gross Domestic Product (GDP) minus depreciation.
Usury laws result in banks making less credit available to lower-income households because
A) higher-income households will pay a higher interest rate than lower-income households. B) loans made to higher-income households have no risk. C) loans to lower-income households are riskier than loans to higher-income households. D) the regulated interest rate does not adequately compensate the bank for the risk of the loan to a lower-income household.
Explain how a profit-maximizing monopolist chooses its level of output and the price of its goods