Homework Answers
1) true
When there are no externalities competitive markets are efficient when left unregulated.
2) true
Competitive market is efficient and monopoly is not.
3) true
When there are externalities competitive markets are inefficient.
4) false
Price ceiling charged above equilibrium price is inefficient.
5) true
Price ceiling charged below equilibrium price is efficient.
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Question 1 When there are no externalities, competitive markets when left unregulated are efficient whereas taxed...
Perfectly competitive, unregulated markets with no externalities will provide the efficient level of a. public goods...
Perfectly competitive, unregulated markets with no externalities will provide the efficient level of a. public goods b. private goods. c. common property resources. d. none of these goods is efficiently provided in perfectly competitive markets. e. all of these goods are efficiently provided in perfectly competitive markets. f. artificially scarce goods Public goods, such as free radio and national parks, are a. nonexcludable and nonrival. b. The same as private goods but supplied by the government. c. excludable and nonrival....
Suppose Price Control B is imposed as a price ceiling. Characterize the situation in the market...
Suppose Price Control B is imposed as a price ceiling. Characterize the situation in the market by selecting all of the correct responses below: Price (S) Price Control B is O A. a binding price ceiling. O B. a non-binding price ceiling. When Price Control B is imposed as a price ceiling. O A. the quantity sold in the market will be equal to the equilibrium quantity OB. the quantity sold in the market will be less than the equilibrium...
Unit 8 Market Failures: Externalities, public goods, natural resources The production of coffee pods results in...
Unit 8 Market Failures: Externalities, public goods, natural resources The production of coffee pods results in environmental damages when consumers throw the pods away. Currently consumers are not responsible for the costs of disposing of these coffee pods. The environmental damages caused by throwing away the coffee pods is an example of a: a Positive externality (6. Negative externality c. Private cost d. Private benefit Consider the market for coffee in the graph to the right. 1. Left unregulated, what...
1.) as markets become increasingly more competitive, which of the following are less likely to remain...
1.) as markets become increasingly more competitive, which of the following are less likely to remain close to achieving? a.) significant producer surplus b.) equity c.) efficiency 2.)when the government intervenes to address market failure in the form of external benefits (positive externalities) it generally imposes taxes in order to internalize those benefits and thus reduces the quantity of those goods produced. a.) true b.) false d.) maximization of consumer surplus 3.) When external costs are present in the production...
Paragraph Styles Unit 8 - Market Failures: Externalities, public goods, natural resources The production of coffee...
Paragraph Styles Unit 8 - Market Failures: Externalities, public goods, natural resources The production of coffee pods results in environmental damages when consumers throw the pods away. Currently consumers are not responsible for the costs of disposing of these coffee pods. MSC MPC The environmental damages caused by throwing away the coffee pods is an example of a:1 Vertical (Value) Axis Major Gridlines a. Positive externality b. Negative externality c. Private costs d. Private benefits Consider the market for coffee...
48. Which statement explains why free markets fail to produce public goods? Firms do not want...
48. Which statement explains why free markets fail to produce public goods? Firms do not want to produce the good because they fear competition will drive the price down below costs. Consumers do not want to buy the good because the price is higher than the value of benefits they would receive. ° Consumers do not want to buy the product because each hopes that someone else will buy it and then all consumers will be able to have the...
at a Drag the words into the correct boxes Market occurs when all Net have been...
at a Drag the words into the correct boxes Market occurs when all Net have been captured. This means Demand will Supply equal and Marginal will equal Costs. This also occurs efficiency when there is no Loss before Net Benefits are all captured when the sum of Consumer and Surplus is greater maximised and there is no under or production or produces Price ceilings set equilibrium are said to be binding. This is because the market results in a where...
Drag the words into the correct boxes Market occurs when all Net have been captured. This...
Drag the words into the correct boxes Market occurs when all Net have been captured. This means Demand will equal and Marginal will equal Costs. This also occurs when there is no Loss. Net Benefits are all captured when the sum of Consumer and Surplus is maximised and there is no under or production or Price ceilings set equilibrium are said to be binding. This is because the market results in a where quantity demanded is than quantity supplied Price...
The perfectly competitive firm's demand curve is: Perfectly elastic. Relatively elastic Perfectly inelastic. Relatively inelastic Statement...
The perfectly competitive firm's demand curve is: Perfectly elastic. Relatively elastic Perfectly inelastic. Relatively inelastic Statement 1: In the long run, firms in a monopolistically competitive industry will be producing that quantity that maximize social surplus. Statement 2: In the long run, firms in a monopolistically competitive industry will be producing at the minimum of its ATC curve. Statement (1) is true; statement (2) is false. Statements (1) and (2) are both true. Statement (1) is false; statement (2) is...
1. Evaluate whether the statement is true or false. Explain why Competitive firm never produces when it is making a...
1. Evaluate whether the statement is true or false. Explain why Competitive firm never produces when it is making a negative profit. a. b. In cost minimization, as wage increases, a firm will always decreases labour input Long run market supply curve in perfect competition is horizontal C. d. If price is lower than equilibrium price, consumer surplus is higher than the equilibrium since consumers can enjoy lower price.
1. Evaluate whether the statement is true or false. Explain why...
Suppose Price Control B is imposed as a price ceiling. Characterize the situation in the market by selecting all of the correct responses below: Price (S) Price Control B is O A. a binding price ceiling. O B. a non-binding price ceiling. When Price Control B is imposed as a price ceiling. O A. the quantity sold in the market will be equal to the equilibrium quantity OB. the quantity sold in the market will be less than the equilibrium...
Unit 8 Market Failures: Externalities, public goods, natural resources The production of coffee pods results in environmental damages when consumers throw the pods away. Currently consumers are not responsible for the costs of disposing of these coffee pods. The environmental damages caused by throwing away the coffee pods is an example of a: a Positive externality (6. Negative externality c. Private cost d. Private benefit Consider the market for coffee in the graph to the right. 1. Left unregulated, what...
Paragraph Styles Unit 8 - Market Failures: Externalities, public goods, natural resources The production of coffee pods results in environmental damages when consumers throw the pods away. Currently consumers are not responsible for the costs of disposing of these coffee pods. MSC MPC The environmental damages caused by throwing away the coffee pods is an example of a:1 Vertical (Value) Axis Major Gridlines a. Positive externality b. Negative externality c. Private costs d. Private benefits Consider the market for coffee...
48. Which statement explains why free markets fail to produce public goods? Firms do not want to produce the good because they fear competition will drive the price down below costs. Consumers do not want to buy the good because the price is higher than the value of benefits they would receive. ° Consumers do not want to buy the product because each hopes that someone else will buy it and then all consumers will be able to have the...
at a Drag the words into the correct boxes Market occurs when all Net have been captured. This means Demand will Supply equal and Marginal will equal Costs. This also occurs efficiency when there is no Loss before Net Benefits are all captured when the sum of Consumer and Surplus is greater maximised and there is no under or production or produces Price ceilings set equilibrium are said to be binding. This is because the market results in a where...
Drag the words into the correct boxes Market occurs when all Net have been captured. This means Demand will equal and Marginal will equal Costs. This also occurs when there is no Loss. Net Benefits are all captured when the sum of Consumer and Surplus is maximised and there is no under or production or Price ceilings set equilibrium are said to be binding. This is because the market results in a where quantity demanded is than quantity supplied Price...
The perfectly competitive firm's demand curve is: Perfectly elastic. Relatively elastic Perfectly inelastic. Relatively inelastic Statement 1: In the long run, firms in a monopolistically competitive industry will be producing that quantity that maximize social surplus. Statement 2: In the long run, firms in a monopolistically competitive industry will be producing at the minimum of its ATC curve. Statement (1) is true; statement (2) is false. Statements (1) and (2) are both true. Statement (1) is false; statement (2) is...
1. Evaluate whether the statement is true or false. Explain why Competitive firm never produces when it is making a negative profit. a. b. In cost minimization, as wage increases, a firm will always decreases labour input Long run market supply curve in perfect competition is horizontal C. d. If price is lower than equilibrium price, consumer surplus is higher than the equilibrium since consumers can enjoy lower price.
1. Evaluate whether the statement is true or false. Explain why...
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