Which of the following is not a cause of market failure?
A) Incomplete information
B) Externalities
C) Individuals acting according to their own self-interest
D) Public goods
C
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Suppose an economy experiences a permanent increase in its natural unemployment rate. This change leads to
A) a downward movement along the short-run Phillips curve. B) a leftward shift of the short-run Phillips curve. C) a rightward shift of the short-run Phillips curve. D) an upward movement along the short-run Phillips curve. E) no change in the short-run Phillips curve.
A general policy of imposing trade restrictions is called
a. protectionism b. import substitution c. quantitative restrictions d. effective protection e. all of the above
A specific tax on sellers will
A) shift the demand curve to the right. B) shift the demand curve to the left. C) shift the supply curve to the right. D) shift the supply curve to the left.
The inputs used to produce cupcakes (e.g., flour, sugar, butter, and labor) are also used to produce cookies, cakes, muffins, pies and many other goods. This suggests that:
A. the elasticity of supply of cupcakes is relatively high. B. the elasticity of supply of cupcakes is relatively low. C. the supply curve for cupcakes is downward sloping. D. cupcakes are a normal good.