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3 Cards in this Set
- Front
- Back
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In markets the invisible hand allocates resources efficiently
A) When the buyers and sellers are the only interested parties. B) When there are positive externalities, but not when there are negative externalities. C) When there are negative externalities, but not when there are positive externalities. D) In all cases |
A) When the buyers and sellers are the only interested parties.
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The term market failure refers to
a) A firm that is forced out of business because of losses. b) A market that fails to allocate resources efficiently. c) Ruthless competition among firms. d) An unsuccessful advertising campaign which reduces demand. |
b) A market that fails to allocate resources efficiently.
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If an externality is present in a market, economic efficiency may be enhanced by
a. increased competition. b. weakening property rights. c. better informed market participants. d. government intervention. |
d. government intervention.
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