Market failures occur whenever
A) private returns may be greater than social returns.
B) social returns may be greater than private returns.
C) the free market produces less than what is socially optimal.
D) monopolies exist in a market.
E) All of the above.
Question 2
The sale of
A) a used textbook does enter GNP.
B) a used textbook does not enter GNP, but the sale of a used house does.
C) both a used textbook and a used house do not enter GNP.
D) a used house does not enter GNP, but the sale of a used book does.
E) the GNP does not include sale of used items priced below 1000.
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