- 9.1: Which of the following is an example of a positiveexternality? a. t...
- 9.2: If the supplier of a good cannot prevent peoplewho dont pay for the...
- 9.3: A good that benefi ts people whether or not theyhave paid for it an...
- 9.4: The tragedy of the commons occurs when goods are a. nonexcludable a...
- 9.5: Which of the following is a source of market failure? a. asymmetric...
- 9.6: If the government wanted to correct for a negativeexternality by im...
- 9.7: If the government wanted to correct for a positiveexternality, it w...
- 9.8: Which of the following is a source of governmentfailure? a. logroll...
- 9.9: Which of the following is an example of a negativeexternality? a. A...
- 9.10: If one persons consumption of a good preventsothers from consuming ...
Solutions for Chapter 9: Market Failure and Government Failure
Full solutions for Explorations in Economics | 1st Edition
average total cost
total cost divided by the quantity of output
the idea that people should pay taxes based on the benefits they receive from government services
the proposition that if private parties can bargain without cost over the allocation of resources, they can solve the problem of externalities on their own
money that takes the form of a commodity with intrinsic value
the failure of majority rule to produce transitive preferences for society
a decrease in the value of a currency as measured by the amount of foreign currency it can buy
the offering of different opportunities to similar individuals who differ only by race, ethnic group, sex, age, or other personal characteristics
goods produced domestically and sold abroad
goods produced abroad and sold domestically
the automatic correction by law or contract of a dollar amount for the effects of inflation
internalizing the externality
altering incentives so that people take account of the external effects of their actions
law of supply and demand
the claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance
marginal tax rate
the amount that taxes increase from an additional dollar of income
two goods with right-angle indifference curves
the amount a seller is paid for a good minus the seller’s cost of providing it
the limited nature of society’s resources
the resources wasted when inflation encourages people to reduce their money holdings
total revenue (for a firm)
the amount a firm receives for the sale of its output
a worker association that bargains with employers over wages, benefits, and working conditions
the study of how the allocation of resources affects economic well-being