Question

NE PRINT LAST NAME, FIRST NAME SECTION MARKET FAILURE. only in ations bility and Age 65 When consumers crs lack perfect information about product prices lcome will be efficient because product prices will always be the same wunder perfectly competitive conditions come may not be efficient because consumers may pay a high price a product that is available for a lower price is where by will not buy the product until they have obtained full information b utcome will be efficient because consumers will only pay a high price for a product if they think it is worth it ents of s for at no the market for information, government sometimes steps into enforce sales that were made on the basis of misleading information prevent sellers from making false and misleading claims enforce contracts that were made on the basis of false information prevent sellers from providing information to buyers. can 2 are Which of the following is an example of a positive extemality? The noise created by an auto racetrack located near a residential area Toxic chemicals dumped into a river that is used as a water supply c. A neighbor who refuses to mow his yard or paint his house A lower crime rate in a neighborhood patrolled by a security company Which of the following is an example of a negative externality? A Boy Scout troop cleaning up a neighborhood park b. Toxic chemicals dumped into a river that is used as a water supply c. A neighbor who plants a beautiful garden in his front yard d. A wealthy citizen donating land for use as a public park When there is a negative externality, the unregulated market results in a level of output that is than the socially efficient level because the private costs are than the social costs. a higher greater b. higher, less lower greater d. lower; less When there is a positive externality, the unregulated market results in a level of output that is than the socially efficient level because the private benefits are than the social benefits. a. higher; greater b. higher; less c. lower greater d. lower; less Chapter 8 Assignments

Answer 1

Due to presence of HOMEWORKLIB POLICY, I am answering first question.

1.

Ans: b.

Explanation:

Presence of imperfect information among consumers regarding price of product can make them pay higher prices when actual prices are lower. This leads to lower consumer surplus in the market and hence, lower market quantity and inefficiency(deadweight loss).

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