a. When the forces of supply and demand lead to an inefficient outcome O it is a signal that the government needs to take ownership of that market including all the resources involved. economists call this a deadweight loss. economists call this a market failure. the economic surplus is maximized. Classify each scenario as to whether it is likely to result in an efficient or inefficient market outcome.
a. When the forces of supply and demand lead to an inefficient outcome O it is a signal that the government needs to take ownership of that market including all the resources involved. economists call this a deadweight loss. economists call this a market failure. the economic surplus is maximized. Classify each scenario as to whether it is likely to result in an efficient or inefficient market outcome.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter12: Environmental Protection And Negative Externalities
Section: Chapter Questions
Problem 14RQ: What is an externality?
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![a. When the forces of supply and demand lead to an inefficient outcome
it is a signal that the government needs to take ownership of that market including all the resources involved.
economists call this a deadweight loss.
economists call this a market failure.
the economic surplus is maximized.
». Classify each scenario as to whether it is likely to result in an efficient or inefficient market outcome.
Efficient
a market transaction in which one party has information not available to the other party
a market in which government regulation creates distortions
Answer Bank
a market dominated by a few powerful businesses
Inefficient
a market transaction in which buyers or sellers behave irrationally
a market in which economic surplus is maximized](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F938b121a-3035-421e-8821-7ef0f56c68ed%2F6068039e-1c13-45d5-bd98-09bebf1e5286%2F5vbx2xg_processed.jpeg&w=3840&q=75)
Transcribed Image Text:a. When the forces of supply and demand lead to an inefficient outcome
it is a signal that the government needs to take ownership of that market including all the resources involved.
economists call this a deadweight loss.
economists call this a market failure.
the economic surplus is maximized.
». Classify each scenario as to whether it is likely to result in an efficient or inefficient market outcome.
Efficient
a market transaction in which one party has information not available to the other party
a market in which government regulation creates distortions
Answer Bank
a market dominated by a few powerful businesses
Inefficient
a market transaction in which buyers or sellers behave irrationally
a market in which economic surplus is maximized
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