Question

Please help me solve these for my final!!

1. Which of the following is an example of a social dilemma?

a) Traffic congestion

b) Climate change

c) Deforestation

d) litter

e) all of the above.

2. Competitive markets generate efficient allocations of:

a) private goods

b) common pool resources

c) artificially-scarce public goods

d) non-excludable public goods

e) all of the above

3. In which of the following markets is the equilibrium efficient?

a) Market for differentiated good

b) Market for labor, when workers' effort is non-verifiable

c) Market for homogenous good that has no external effect

d) Market for homogenous good that generates pollution

e) Market for a good with a high barriers to entry

4. The market for used cars is inefficient because:

a) Few buyers

b) Few sellers

c) buyers have perfect information about cars being sold

d) buyers have imperfect information about cars being sold

e) sellers only put high-quality cars on the market

5. Which of the following activities generates a positive external effect?

a) Burning fossil fuels

b) Planting flowers in front yard

c) Driving on congested road

d) Playing loud music at night

e) Pumping water from a depleted aquifer

6. Which of the following best summarizes trends in global income inequality since 1980?

a) most of the inequality in the world results from inequality within countries, and this is declining

b) most of the inequality in the world results from inequality within countries, and this is increasing

c) Inequality between individuals within most countries is declining, leading to a decline in global inequality

d) Inequality between countries is declining, while inequality within countries is rising, with the net effect being a falling global inequality

e) Inequality between countries is declining, while inequality within countries is rising, with the net effect being a rising global inequality

Answer 1

1) :-climate change is example of social dilemma.

• over population, deportation etc are also example of it.

2) :-competitive market generate efficient allocation of private good.

• private good allocation create equilibrium and symmetry.

3) :-c is right option that market is equilibrium efficient when market for homogenous good that has no external effect.

•market equilibrium efficient when their is no external benefits and no external cost.

4) :-d is right option market for used car is efficient because buyer have imperfect knowledge about car being sold.

• Asymmetrical information is problem creater.

• seller have more information and knowledge then buyer.