Foundations of Economics (8th Edition)
Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 10, Problem 3MCQ
To determine

To choose:

The option that correctly explains the effect of an unregulated paint factory polluting a river.

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Classify the source of market failure in each case listed. Market Failure Market Power Externality A manufacturing plant dumps chemical waste into a nearby river, poisoning the water supply for a small town downstream.       A single public utilities company is responsible for supplying electricity for an entire state. As a result, the utilities company can set the price of electricity.
Can you think of some social costs or issues that are not included in the marginal cost to the firm? Or some social gains that are not included in what people pay for a good?
What is the term used to describe the situation where resources are allocated in a way that maximizes total surplus? A. Pareto efficiency B. Market equilibrium C. Social welfare D. Deadweight loss
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