Markets can fail to achieve efficiency when
a. there are prices consumers do not think are fair.
b. there are wages workers do not think are fair.
c. trade puts people out of work.
d. there are public goods.
d
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The income elasticity of demand for movies in the United States is 3.41. If people's incomes decrease by 1 percent, what is the decrease in the quantity of movies demanded?
What will be an ideal response?
If you pay $2,000 in taxes on an income of $20,000, and a tax of $3,000 on an income of $30,000, then over this range of income the tax is
A) regressive. B) proportional. C) progressive. D) There is insufficient information to answer the question.
If domestic investment is growing faster than domestic savings, then net capital flows must be
A) shrinking. B) positive. C) negative. D) growing.
Assume that foreign capital flows into a nation rise due to expected increases in stock market appreciation. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the GDP Price Index and the nominal value of the domestic currency in the context of the Three-Sector-Model? a. The GDP Price Index rises and nominal value of the domestic
currency falls. b. The GDP Price Index falls and nominal value of the domestic currency remains the same. c. The GDP Price Index rises and nominal value of the domestic currency remains the same. d. The GDP Price Index rises and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.