Which of the following could be a reason for the type of market failure known as information failure? a.) Information symmetry b.) Information asymmetry c.) Unrestricted markets d.) Restricted markets
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- Define the following and give specific example for each: (i) Law of large numbers (ii) Actuarially fair (iii) Value of informationExercice 2: c 1. Can you give an example of a market that, according to Sandel, is likely to have a corrupting effect in the above sense? 2. Who worries more about the corrupting effects of markets: Sandel OR Jason Brennan and Peter Jaworski?Which of the following statements is correct? Select one: a.In models of network goods with positive externalities, no consumption is always an equilibrium. b. The equilibrium in the hotelling model when both firms have the same location is for the firms to set their prices equal to their (constant) marginal cost even if their marginal costs are different. c. If all firms start wiht the same techonology, under both minor and drastic innovations the inovator firm is only one firm producing after the innovation. d. The Schumpeter hypothesis establishes that competitive firms have higher capacity to produce R&D than monopolies.
- Question 1 The mayor of a village is considering to build a public park. There are 5 people living in the village and the benefits from the public park are given as follows: v1=$0, v2=$100, v3=$200, v4=$300, v5=$400. The cost of the park is $800. Consider the demand revealing (Vickrey-Clarke-Groves) mechanisms. Which of the following statement is false? A. In the Groves mechanism, Individual 1 receives $200 B. Optimal level of public good is provided C. Individuals report their true benefits to the municipality D. In the Clarke pivotal mechanism, Individual 1 neither receives nor pays any money E. None of the above2a. Graphic and describe the market for Spam. 2b. Graph and describe what happens in this market when people's incomes fall. (Include this in the graph for 2a).Q5. Provide your own example regarding each 4 types of market failures and explain why that is a market failure. Explanation:
- Which economic concept most closely relates to the legal concept of justiciability? economies of scale pareto optimality diminishing marginal returns O comparative advantageThe diagram belew gives informetion about demand and supply for robots in Econland 13 12 11 10 $ 9 8. 4. 012 3 4 5 6 7 89 10 Suppose that each robot in Econland creates a $5 positive externality because of how they make neighborhoods a safer place. What is the consumer surplus of Econland in the free market? (Note: A common question here is whether you should include the externality or not. This is part of this question for you to decide on whether to do so or not.) O -12.5 O 37.5 O 17.5 O75 O 12.5 432109876543210Consider the market for compact stereos, which are units that typically include a radio, compact disc player, and a set of relatively small speakers. Both high and low quality stereo systems are sold on the market. Assuming that sellers have more information regarding quality than buyers (although buyers do have some information), would the fraction of high quality systems on the market be higher, lower or the same as in the case of full information for buyer and seller? B. What practices have arisen in the market to help alleviate the asymmetric information problem that consumers face?
- For each of the following statements, tell whether the statement is TRUE, FALSE, or UNCERTAIN, and explain your reasoning. a) If the good produced by a monopoly causes positive externalities, then the extra benefit of the positive externalities will mitigate any deadweight loss caused by the monopoly's pricing power. b) When income rises, a demand curve will always shift out, increasing the quantity that will be bought at all price levels. c) The demand for a good will shift inward when the price of a complementary good increases d) If rent control is imposed in a city then this will cause landlords in neighboring cities to lower their rents to compete with landlords in the rent-controlled city; otherwise, they will lose tenants to the rent-controlled cityInsurance exchanges: A. are government-regulated markets where individuals can purchase health insurance to satisfy the personal mandate provision of the PPACA.B. are expected to significantly increase health care costs by expanding government regulation.C. are government-regulated markets where prices are set directly by federal regulators.D. allow patients to get medical treatment when away from the providers covered by their regular health insurance.Question Consider two individuals, Adam and Eve, who have the following in-verse demand curves and face a marginal cost curve below. PA = 100 1/2 Qa; PE = 200 Qe MC = 2/3 Q (a) If the good is private, what is the equilibrium price and quantity in a competitive market? Is this outcome ecient? (b) If the good is public, ecient provision implies what price and quantity in the market?