The statement everything affects everything else reflects the principle behind ?

A. Efficiency analysis
B. Partial equilibrium analysis
C. General equilibrium analysis
D. Equity analysis

imperfect competition occurs ?

A. When firms are not profit maximisers
B. When firms have some control over price and competition
C. When the consumption of the good involves an external benefit
D. Whenever firms are losing money.

The whole class of goods that will be under produced or not produced at all in a completely unregulated market economy are referred to as ?

A. Pareto goods
B. Public goods
C. Private goods
D. Free goods

If some gain and some lose as the result of a proposed change and it can be demonstrated that the value of the gains would exceed the value of the losses then the change is said to be ?

A. Technically efficient.
B. Inefficient.
C. Potentially efficient
D. Unequivocally pareto optimal

A person will continue to pursue an activity up to the point where ?

A. Marginal benefit equals marginal damage cost
B. Marginal benefits equals marginal social cost
C. Marginal benefit equals marginal private cost
D. Marginal social cost equals marginal external cost

The idea that when externalities are present private parties can arrive at the efficient solution without government intervention under certain circumstance is known as ?

A. The coase theorem
B. Arrow’s impossibility theorem
C. The drop -in-the bucket problem.
The free rider problem

Markets fail to produce an efficient allocation of resources, but government also fail because ?

A. Elected officials will act selfleSSLy for the good of society and ignore their own self interest
B. The managers of government agencies are trying to maximize the profit of their agency and they ignore the implications that this has on other departments
C. The optimal level of public goods may be too expensive for the society to produce
D. The measurement of social damages and benefits is difficult and imprecise

When you consume good Q, not only do you benefit form consuming the good but other people benefit from your consumption as well, if firms produce good Q where P = MC, firms will be producing ?

A. Less than the efficient level of output
B. More than the efficient level of output
C. So that consumer surplus is zero
D. The efficient level of output

The government increase the minimum wage. The National Association of Fast Food Restaurants hires you to determine the impact that this higher minimum wage will have on it industry. This is an example of ?

A. Industry equilibrium analysis
B. Specific equilibrium analysis
C. Partial equilibrium analysis
D. General equilibrium analysis

The conclusion that free, unregulated markets will produce an efficient outcome breaks down if ?

A. Households do not have perfect information
B. Firms are not price takers in input markets
C. Firms are not price takers in the output market
D. All of the above