�建 Microsoft Word �档

�建 Microsoft Word �档 - CHAPTER 4 1....

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CHAPTER 4 1. The term market mechanism refers to: A) The use of market prices and sales to determine resource allocation. B) Resource allocation based on a production-possibilities curve. C) Resource allocation based on a consumer needs. D) Government laws and regulations concerning how the market should operate. 2. The most desirable combination of goods on the production-possibilities curve is known as: A) The equilibrium output. B) The optimal mix of output. C) The mixed economy. D) Public goods. 3. Market failure implies that the market mechanism: A) Leads the economy to a point outside the production-possibilities curve. B) Leads the economy to the wrong mix of output. C) Causes shortages or surpluses in the market. D) Leads to government failure. 4. Which of the following is a situation of market failure? A) An inequitable distribution of goods and services. B) Public goods are underproduced. C) The market price excludes the effects of externalities, such as pollution.
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This note was uploaded on 04/11/2011 for the course ECO 2251 taught by Professor Kirkland during the Spring '09 term at Troy.

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�建 Microsoft Word �档 - CHAPTER 4 1....

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