Principles of Microeconomics
7th Edition
ISBN: 9781305156050
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 11, Problem 5CQQ
To determine
Characteristic of a public good.
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This is a form of governmental public policy that has been implemented to reduce the purchase of cigarettes and alcohol.
A.Marketing limitations
B.Raising the legal age
C.Vending machine regulations
D.Taxation
An example of a barrier to entry in a market is:A. Lack of profitable opportunities.B. Increasing cost of production.C. Inelastic market demand.D. Government licensing requirement.
The following statements are FALSE about market failures EXCEPT
a.An efficient monopoly in allocating its resources causes a large consumer surplus.
b.Price mechanism in the private market allow limited resources to be efficiently used.
c.Market mechanism provide an opportunity to enter a perfectly competition market.
d.Market mechanism are not the best tool to distribute resources fairly.
Chapter 11 Solutions
Principles of Microeconomics
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- The deadweight loss in a monopoly occurs because: A. The monopolist produces less than the socially optimal output level.B. There is perfect competition in the market.C. The monopolist is forced to produce at a loss due to government intervention.D. Consumer surplus is maximized at the monopoly price.arrow_forwardExplain in brief. a) Why government should intervention in a monopoly market. b) Give a practical example of government intervention in the monopoly market.arrow_forwardWhich of the following is least likely to be associated with market failure, and is consequently least likely to require any form of state regulation or intervention? OA Hake fishing off the west coast of South Africa OB. The provision of education services in government schools OC The provision of education services in private schools D. The market for fast foods Fi Previeus page E s heretosarrow_forward
- Please submit the answer and then watch the video feedback.Farmer Ted sells 1,000 bushels of wheat at a price of $5 per bushel in a competitive market. Wilma sells 5 gallons of water at a price of $5 per gallon in a monopoly market. If both Farmer Ted and Wilma want to sell a higher quantity, what happens to their respective prices? a.Farmer Ted's price remains constant and Wilma's price decreases. b.Farmer Ted's price decreases and Wilma's price remains constant. c.Farmer Ted's price remains constant and Wilma's price increases. d.Both Farmer Ted's and Wilma's prices decrease.arrow_forwarda. On a graph, show the quantity of beehives that the beekeeper will choose if there are barriers to negotiation with the orchardist and show how subsidizing beehives can lead to the efficient quantity. b. On another graph show how subsidizing honey can lead to the efficient quantity.arrow_forwardWhich of the following is NOT an example of government intervention in the market? a. Corporate social responsibility b. Use of competition policy to prevent mergers c. Regulation prices d. Legislation banning the sale of the productarrow_forward
- In which case is there no evidence of market failure? a. Intense competition in a fruit market b. A steel plant pollutes a nearby river c. Buyers of goods are uncertain about their quality d. A monopoly maximises its profitsarrow_forwardWhich of the following describes the type of entry barrier faced for taxicabs? A. There is a natural entry barrier for taxicabs because entry into the market has been limited through price cutting B. There is a natural entry barrier for taxicabs because entry into the market has been limited through quotas. C. There is a created entry barrier for taxicabs because entry into the market has been Ilimited through quotas. D. There is a created entry barrier for taxicabs because entry into the market has been limited through limited access to key natural resources.arrow_forwardHow would you describe the development of the market regulation and the concept of "fair competition" in the market?arrow_forward
- Which of the following describes the type of entry barrier faced for hotels? A. There is a natural entry barrier for taxicabs because entry into the market has been limited through quotas. B. There is a natural entry barrier for hotels because entry into the market has been limited by the economies of scale. C. There is a created entry barrier for hotels because entry into the market has been limited by the economies of scale. D. There is a created entry barrier for hotels because entry into the market has been limited through limited access to key natural resources.arrow_forwardThe government must provide public goods such as national defense because a. the production of public goods requires economies of scale that the private sector cannot achieve b. t is generally impossible to exclude individuals who value public goods but do not pay for them c. public goods cannot be produced in private competitive markets, since they have highly inelastic demand d. private producers charge a price that is substantially greater than marginal cost e. no single individual should have to pay for public goods, since they benefit society as a wholearrow_forwardMarket failure can be caused by Select one: O a. government intervention and price controls Ob. externalities and market power Oc. low consumer demand O d. high prices and foreign competitionarrow_forward
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