Suppose that, recognizing that an efficient market outcome may not me equitable, a central planner announces that each agent's net benefit (the difference between the reservation value and the price paid) beyond a certain amount will be taken away and redistributed to other agents whose new benefit is below the specified level. This policy is expected to produce ___________
A) an efficient outcome where every agent has the same net benefit
B) an efficient outcome where every agent has 0 net benefit
C) an inefficient outcome where no trade will occur
D) an inefficient outcome where trades will occur at the higher price than at the equilibrium
Ans: C) an inefficient outcome where no trade will occur
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The demand for microwaves in a certain country is given by: D = 8,000-30P, where P is the price of a microwave. Supply by domestic microwave producers is: S = 4,000 + 10P. Suppose the economy is closed. The equilibrium price of a microwave is ________ and equilibrium quantity is____.
A. $100; 5000 B. $125; 4000 C. $50; 8000 D. $75; 6000
Suppose that the production function is Y = AK0.7L0.3, the number of workers equals 800, the capital stock is $150,000, and total factor productivity is 3
What is the value of real GDP? What will happen to real GDP if total factor productivity doubles?
The reason that Blu-ray movies cost more money immediately after they are released than they do six months later is due to price discrimination.
Answer the following statement true (T) or false (F)
A high degree of concentration in a market suggests that firms in that market:
A. have the power to control prices. B. are perfectly competitive. C. cannot act strategically. D. have formed an illegal cartel.