Question 1
Assume that the marginal cost of growing pine trees does not include the benefit to the environment as a result of carbon dioxide reduction. By producing where
P =
MC, the grower will be producing ________ the efficient amount of pine trees.
◦ less than
◦ more than
◦ exactly
◦ sometimes more and sometimes less than
Question 2
Sources of market failure include
◦ private goods.
◦ imperfect information.
◦ inflation.
◦ perfect competition.