All of the following can occur with a market failure except options: the price in the free market is too high. the quantity in the free market is too low. resources are allocated efficiently. the quantity in the free market is too high.
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options:
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the price in the free market is too high.
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the quantity in the free market is too low.
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resources are
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the quantity in the free market is too high.
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- When a market is competitive and functioning properly, economic theory predicts that the market equilibrium will be efficient. However, this may not always be the desired outcome. Market outcomes may be unequal or distorted by market failure. Offer an example of a market where you consider the real-world outcome to be unacceptable. Why is the market outcome unacceptable? How can government policy improve on the market equilibrium? Will this solution create a surplus or shortage in the market according to economic theory? Explain. What effect will this solution have on consumer surplus, producer surplus, social surplus, and deadweight loss? Explain.This is a picture of a farmer's market. A farmer's market is a place where farmers bring their fresh produce to sell to consumers at low prices. Based on the information provided to you, name at least two scarce resources that were probably used to produce the fruits and vegetables shown in the picture. What would happen if one of those resources were no longer available? Choose which resource you want to pretend is no longer available, then provide an example as to how the business would be affected.Which of the following is NOT a way that the government can intervene in markets? a)The government can set minimum wages. b)The government can raise taxes on a particular item. c)The government can pass laws on sales taxes. d)The government can stop the forces of demand and supply from working in markets.
- In a free market economy, the price of a product is determined by the relationship between supply and demand. Suppliers are more willing to supply a product at higher prices. So when the price is high, supply is high. On the other hand, consumers of a product are generally less willing to buy a product at higher prices. So when the price is high, demand is low. In a free competitive market, the price of a product tends to move toward an equilibrium price, in which the supply and demand are equal; that common value of the supply and demand is the equilibrium quantity. To find the equilibrium price, we solve the system consisting of the price-supply and price-demand equations. At a price of $4.81 per pound, the supply for cherries is 16,130 pounds, and the demand is 10,348 pounds. When the price drops to $4.22 per pound, the supply decreases to 10,590 pounds and the demand increases to 12,824 pounds. Assume that the price-supply and price-demand equations are linear. What is the…In a free market economy, the price of a product is determined by the relationship between supply and demand. Suppliers are more willing to supply a product at higher prices. So when the price is high, supply is high. On the other hand, consumers of a product are generally less willing to buy a product at higher prices. So when the price is high, demand is low. In a free competitive market, the price of a product tends to move toward an equilibrium price, in which the supply and demand are equal; that common value of the supply and demand is the equilibrium quantity. To find the equilibrium price, we solve the system consisting of the price-supply and price-demand equations. At a price of $4.97 per pound, the supply for cherries is 16,289 pounds, and the demand is 10,218 pounds. When the price drops to $4.31 per pound, the supply decreases to 10,676 pounds and the demand increases to 12,992 pounds. Assume that the price-supply and price-demand equations are linear. What is the…Which of the following statements describes Principle 7: Government can sometimes improve the market outcomes? Local government implements curfew between 9 pm to 4 am. Bangko Sentral ng Pilipinas printing new bank notes in preparation to year end holidays. Department of Trade and Industry implements price freeze for essential goods during pandemic. Government signs free tertiary education law. What will happen to the supply and demand curve, equilibrium price and quantity of boots if price of leather used for making the shoes rises? supply curve shift rightward; demand curve the same; equilibrium price increases; equilibrium quantity decreases supply curve shift rightward; demand curve shifts leftward; equilibrium price increases; equilibrium quantity decreases supply curve shift leftward; demand curve the same; equilibrium price increases; equilibrium quantity decreases supply curve shift leftward; demand curve shifts leftward; equilibrium price increases; equilibrium quantity…
- Which of the following represents a market failure? a) people prefer to have more restaurant meals so the price of dining out increases b) an airline increase ticket prices and fewer people choose to fly c) a market fails to produce enough luxury cars for everyone to own d) in a poor country, education is not subsidized by the government, so fewer children go to schoolEquilibrium in the market is achieved when there is the same number of buyers and sellers. there is no shortage or surplus of products. every buyer buys a product from the seller. buyers and sellers agree on the same price.Markets usually lead to efficiency for all of the following reasons except: Businesses with high costs may not survive. Markets encourage specialization and trade. Businesses have incentives to sell what people want to buy. Markets increase people's incentive to be self-sufficient.
- If the equilibrium quantity in a competitive market is 25, but society (by some means) buys and sells a total of 41 units, then an inefficiency is caused by the exchange of 16 units.True or FalseThe price of the Amazon Echo smart speaker is falling. In a free-market economic system where everything else is equal, the most likely explanation is the government determined that the product was not worth its price tag. sellers cannot keep up with market demand. the product has competition at the equilibrium price. there is a smart speaker shortage in the United States.Which of the following statements best describes equilibrium in a market? At equilibrium, quantity demanded equals quantity supplied. Equilibrium is a tendency for price to change, a state of perpetual motion. At equilibrium, there will always be a surplus for consumers to purchase. At equilibrium, market forces NO longer apply.
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