Market failure implies that a policy of laissez-faire:
A.) Leads the economy to a point beyond the production possibilities curve.
B.) Leads the economy to an undesirable point on the production possibilities curve.
C.) Is superior to government intervention.
D.) Causes government failure.
B.) Leads the economy to an undesirable point on the production possibilities curve.
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In monopolistic competition, there is inefficiency because price is greater than marginal cost. What brings about this inefficiency?
A) high concentration, as indicated by the large concentration ratio B) product differentiation C) freedom of entry and exit D) marginal cost rises as more output is produced E) the fact there are many firms in the market
Consider the following earnings function:
ahei= ?0 + ?1×DFemmei + ?2×educi+...+ ui versus the alternative specification ahei= ?0 × DMale + ?1×DFemmei + ?2×educi+...+ ui where ahe is average hourly earnings, DFemme is a binary variable which takes on the value of "1" if the individual is a female and is "0" otherwise, educ measures the years of education, and DMale is a binary variable which takes on the value of "1" if the individual is a male and is "0" otherwise. There may be additional explanatory variables in the equation. a. How do the ?s and ?s compare? Putting it differently, having estimated the coefficients in the first equation, can you derive the coefficients in the second equation without re-estimating the regression? b. Will the goodness of fit measures, such as the regression R2, differ between the two equations? c. What is the reason why economists typically prefer the second specification over the first? What will be an ideal response?
State and local property taxes are regressive
a. True b. False Indicate whether the statement is true or false
Suppose at a particular level of real gross domestic product (GDP), there are no unintended inventory adjustments. In this context, which of the following is true?
What will be an ideal response?