Podcast
Questions and Answers
Market failure can be caused by
Market failure can be caused by
- low consumer demand.
- government intervention and price controls.
- externalities and market power. (correct)
- high prices and foreign competition.
An example of an externality is the impact of
An example of an externality is the impact of
- bad weather on the income of farmers.
- the personal income tax on a person's ability to purchase goods and services.
- pollution from a factory on the health of people in the vicinity of the factory. (correct)
- increases in health care costs on the health of individuals in society.
If a copper refinery does not bear the entire cost of the smoke it emits, it will
If a copper refinery does not bear the entire cost of the smoke it emits, it will
- not emit any smoke so as to avoid the entire cost of the smoke.
- emit lower levels of smoke.
- emit an acceptable level of smoke.
- emit too much smoke. (correct)
Which of these activities will most likely result in an external benefit?
Which of these activities will most likely result in an external benefit?
If education produces external benefits for society, which of the following might NOT be an appropriate policy for society to adopt regarding education?
If education produces external benefits for society, which of the following might NOT be an appropriate policy for society to adopt regarding education?
Market power refers to the
Market power refers to the
In the United States, higher income tax rates on rich people could be justified on the basis of
In the United States, higher income tax rates on rich people could be justified on the basis of
The basic principles of economics imply that policymakers should
The basic principles of economics imply that policymakers should
Suppose you have $100 to invest. There are 3 potential one-year projects you can choose from and they only differ in their returns. After one year, you can get $110 from Project 1, $102 from Project 2, and $115 from Project 3. What would be the total cost (including the opportunity cost) if you choose Project 1?
Suppose you have $100 to invest. There are 3 potential one-year projects you can choose from and they only differ in their returns. After one year, you can get $110 from Project 1, $102 from Project 2, and $115 from Project 3. What would be the total cost (including the opportunity cost) if you choose Project 1?
Mike has spent $500 purchasing and repairing an old fishing boat, which he expects to sell for $800 once the repairs are complete. Mike discovers that, in addition to the $500 he has already spent, he needs to make an additional repair, which will cost another $400, in order to make the boat worth $800 to potential buyers. He can sell the boat as it is now for $300. What are the cost and benefit associating with the decision of making the additional repair?
Mike has spent $500 purchasing and repairing an old fishing boat, which he expects to sell for $800 once the repairs are complete. Mike discovers that, in addition to the $500 he has already spent, he needs to make an additional repair, which will cost another $400, in order to make the boat worth $800 to potential buyers. He can sell the boat as it is now for $300. What are the cost and benefit associating with the decision of making the additional repair?
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