Attempts Average / 2 8. Property rights and market failures Bakers are much likely to supply pastries to the market if property rights are not enforced. In the presence of market failures, public policy can improve economic efficiency. Classify the source of market failure in each case listed. Market Power Market Failure Externality A manufacturing plant dumps chemical waste into a nearby river, poisoning the water supply for a small town downstream. There is only one car dealership in a small town, giving the dealership the ability to influence the price of cars.
Attempts Average / 2 8. Property rights and market failures Bakers are much likely to supply pastries to the market if property rights are not enforced. In the presence of market failures, public policy can improve economic efficiency. Classify the source of market failure in each case listed. Market Power Market Failure Externality A manufacturing plant dumps chemical waste into a nearby river, poisoning the water supply for a small town downstream. There is only one car dealership in a small town, giving the dealership the ability to influence the price of cars.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Average / 2
8. Property rights and market failures
Bakers are much
likely to supply pastries to the market if property rights are not enforced.
In the presence of market failures, public policy can improve economic efficiency.
Classify the source of market failure in each case listed.
Market
Market Failure
Power
Externality
A manufacturing plant dumps chemical waste into a nearby river, poisoning the water supply for a small town
downstream.
There is only one car dealership in a small town, giving the dealership the ability to influence the price of cars.
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