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Macroeconomics Study Set 42

Business

Quiz 16 :

Market Failures and Government Intervention

Quiz 16 :

Market Failures and Government Intervention

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If typical firms in a competitive industry are earning economic profits, the industry
Free
Multiple Choice
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Answer:

D

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Economic losses in an industry are a signal that
Free
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Answer:

D

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Which of the following roles of the government is most fundamental to a societyʹs ability to function safely and carry on normal economic and social life?
Free
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Answer:

D

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One part of the ʺinformal defenceʺ of the market system is the argument, made forcefully by the late Milton Friedman, that free markets provide for the
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Economists describe prices as ʺsignalsʺ in a market economy because
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The ʺinformal defenceʺ of free markets includes the argument that competitive markets 1) lead to allocative efficiency; 2) provide automatic coordination of the actions of decentralized decision makers; 3) provide a stimulus to innovation and economic growth because of the pursuit of profits.
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Economists use the term ʺmarket failureʺ to refer to those free-market situations where
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In a free-market system, a disequilibrium in one market
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When prices are determined in a free-market system
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The concept of ʺinstitution buildingʺ is becoming more prominent. Which of the following best describes the aim of institution building?
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The ʺformal defenceʺ of free markets includes the argument that competitive markets
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Which of the following statements about market economies is true?
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The ʺinformal defenceʺ of free markets includes the argument that markets
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Which of the following statements about free-market economies is false?
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Which of the following statements about the price system is most accurate? The price system
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The essential coordinating mechanism of a free-market economy is
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In a competitive market economy with no externalities, allocative efficiency would exist if
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In a free-market economy that is continually adjusting toward equilibrium, a primary force driving this adjustment is
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Profit-motivated product and process innovation is primarily a characteristic of systems.
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In a free-market economy,
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