ECON 2010 FINAL

There are no negative externalities so it is

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Unformatted text preview: ber from society's perspective. D) The market equilibrium quantity of cigarettes smoked will be less than the socially efficient number. there are no negative externalities so it is efficient Version 1 Page 15 69. Market failures are things that are inherent to the market that cause the market allocation to be inefficient A) True Externalities cause market failures which are inherent in the market place B) False 70. Consider a utility possibilities frontier. Imagine a society must choose between one specific efficient allocation and one specific inefficient allocation. The society will always choose the efficient allocation. A) True B) False 71. Trades can be involuntary transactions A) True definition B) False 72. Within a firm, inputs are not allocated by markets. A) True B) False 73. Karen consumes gasoline and other goods. A new excise tax on gasoline raises gas prices. However, the government pays Karen an income subsidy that is just enough for her to stay on her original (pre-tax) indifference curve. Her new optimal consumption bundle will have: A...
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This document was uploaded on 02/18/2014 for the course ECON 2010 at Colorado.

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