Principles of Microeconomics (12th Edition)
Principles of Microeconomics (12th Edition)
12th Edition
ISBN: 9780134078816
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Chapter 12, Problem 3.1P

(a)

To determine

Validate the statement on sources of market failure.

(b)

To determine

Validate the statement on sources of market failure.

(c)

To determine

Validate the statement on sources of market failure.

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Part A:  Several years ago, hurricane Gilbert destroyed thousands of acres of banana in Jamaica.  Farmers whose crops were destroyed by the hurricane were much worse off, but farmers whose crops were not destroyed benefitted from the hurricane.  Why did this occur? what information would you need about the market for bananas in order to assess whether farmers as a group were hurt or helped by the floods? Part B:  Explain why the following might be true: A drought in the Caribbean raises the total revenue that producers receive from the sale of coffee, but a drought only in Grenada reduces the total revenue that Grenadian producers receive.
Several years ago, hurricane Gilbert destroyed thousands of acres of banana in Jamaica. Farmers whose crops were destroyed by the hurricane were much worse off, but farmers whose crops were not destroyed benefited from the hurricane. Why did this occur? What information would you need about the market for bananas in order to assess whether farmers as a group were hurt or helped by the floods?Explain that in detail using graphs .
Which of the following do economists not generally regard as a legitimate reason for the government to intervene in a market? a. To promote efficiency b. To protect an industry from foreign competition c. To enforce property rights d. To promote equality
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