MGE 305 - 1. When markets are imperfect and exhibit...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
1. When markets are imperfect and exhibit externalities Answer A.there is an inefficient allocation and use of society's scarce resources B. government intervention will not improve market performance C. society's well-being is not affected D.government intervention will always improve market performance 0.34 points Question 2 1. Distortions in the market may be caused by Answer A.imperfect information B. public goods C. externalities D.all of the above E. none of the above 0.34 points Question 3 1. When a good generates an externality in the market, Answer A.society's scarce resources are allocated efficiently B. someone is affected who is not involved in the buying or selling of the good C. the good's price reflects the externality D.government intervention can never improve the market's performance 0.34 points Question 4
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
1. A market failure exists when Answer A . the price established in the market equals the marginal cost of production B. resources are optimally allocated C. the price established in the market does not equal the marginal social benefit of a good and the marginal social cost of production D . competitive markets' clearing price equals both the marginal social cost and
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 6

MGE 305 - 1. When markets are imperfect and exhibit...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online