Which self-correcting mechanism do businesses have but government agencies do not?
a. Competitors
b. Budgets
c. Contracts
d. Administrative tasks
a. Competitors
Market competition is a self-correcting mechanism that firms have and government agencies do not.
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Your classmates from the University of Chicago are planning to go to Miami for spring break, and you are undecided about whether you should go with them. The round-trip airfares are $600, but you have a frequent-flyer coupon worth $500 that you could use to pay part of the airfare. All other costs for the vacation are exactly $900. The most you would be willing to pay for the trip is $1400. Your only alternative use for your frequent-flyer coupon is for your trip to Atlanta two weeks after the break to attend your sister's graduation, which your parents are forcing you to attend. The Chicago-Atlanta round-trip airfares are $450. If the Chicago-Atlanta round-trip air fare were $350, should you use the coupon to go to Miami?
A. Yes, your economic surplus would be $400. B. Yes, your economic surplus would be $50. C. No, your economic surplus would be ?$100. D. No, your economic surplus would be ?$50.
The slope of the demand curve and the price elasticity of demand are
a. basically the same thing b. determined by supply c. are derived from production and distribution costs d. different because slope is based on absolute changes and elasticity is based on percentage changes e. implicit in the shape of the supply curve
Most countries in the world have Gini coefficients ranging from:
A. 0.30 to 0.40. B. 0.25 to 0.60. C. 0.20 to 0.85. D. 0.10 to 0.50.
What are market failures? Discuss examples of market failures. What can government do to improve the results of market failures?
What will be an ideal response?