d. a decrease in the number of visits people want to make and a decrease in the number of visits health care providers want to provide.
ANSWER: b
78. If the government were to intervene and set a wage for unskilled labor above the market wage, then we would expect, relative to the market outcome,
a. an increase in the number of unskilled jobs available.
b. a decrease in the number of unskilled jobs available.
c. a decrease in the number of workers wanting unskilled jobs.
d. an increase in the number of businesses using unskilled workers.
ANSWER: b
79. When the government prevents prices from adjusting naturally to supply and demand, it
a. equates the amount buyers want to buy with the amount sellers want to sell.
b. adversely affects the allocation of resources.
c. improves equality and efficiency.
d. improves efficiency but reduces equality.
ANSWER: b
80. The ability of an individual to own and exercise control over scarce resources is called
a. market failure.
b. property rights.
c. externality.
d. market power.
ANSWER: b
81. The term used to describe a situation in which markets do not allocate resources efficiently is
a. economic meltdown.
b. market failure.
c. equilibrium.
d. the effect of the invisible hand.
ANSWER: b
82. The term market failure refers to
a. a situation in which the market on its own fails to allocate resources efficiently.
b. an unsuccessful advertising campaign which reduces demand for a product.
c. a situation in which competition among firms becomes ruthless.
d. a firm that is forced out of business because of losses.
ANSWER: a
83. Which of the following do economists not generally regard as a legitimate reason for the government to intervene in a market?
a. To promote efficiency
b. To promote equality
c. To enforce property rights
d. To protect an industry from foreign competition
ANSWER: d
84. Thousands of people develop lung cancer from second-hand exposure to cigarette smoke. This is an example of
a. a market failure caused by an externality.
b. a market failure caused by market power.
c. a market failure caused by equality.
d. There is no market failure in this case.
ANSWER: a
85. If an externality is present in a market, economic efficiency may be enhanced by
a. government intervention.
b. a decrease in foreign competition.
c. fewer market participants.
d. weaker property rights.
ANSWER: a
86. Which of the following is an example of an externality?
a. Zima purchases a new pants suit.
b. Malik's bird chirps loudly during the night, waking his neighbors.
c. Roberto sells a book to Kevin, who uses the book and then gives it to Lee as a gift.
d. Kalene watches a scary movie.
ANSWER: b
87. The willingness of citizens to pay for vaccinations does not include the benefit society receives from having vaccinated citizens who cannot transmit an illness to others. This extra benefit society gets from vaccinating its citizens is known as
a. productivity.
b. an externality.
c. market power.
d. property rights.
ANSWER: b
88. Laws that enforce chemical hazard control are examples of government intervention that is intended to reduce
a. efficiency.
b. equality.
c. externalities.
d. productivity.
ANSWER: c
89. Which of these activities will most likely impose an external cost?
a. An athlete works out at a gym.
b. A postal worker smokes a cigarette in a crowded break room.
c. A young father pushes his baby in a stroller.
d. A construction worker eats a hotdog during her lunch break.
ANSWER: b
90. Which of these activities will most likely result in an external benefit?