A Market Failure Occurs When

question 232

Multiple Choice

A market failure occurs when:

• A)some people are able to buy many more goods than other people are.
• B)the individual's pursuit of self-interest means some people will not be able to buy all of the goods they need.
• C)the individual's pursuit of self-interest makes the society worse off.
• D)while pursuing their self-interest, some people may make a mistake-for example, they may regret buying a particular car.

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Definitions:

Marginal Revenue Product

The additional revenue generated from employing one more unit of a resource, assuming all else constant.

Labor Supply Curves

Graphical representations showing the relationship between the wages offered by employers and the amount of labor workers are willing to supply at those wages.

Marginal Revenue Product

The extra income obtained by utilizing an additional unit of a resource.

Marginal Revenue Product

The additional revenue generated from using one more unit of a resource or input in the production process.