Question

Which of the following causes of “market failure” is NOT a major concern in the case of greenhouse gas emission and climate change?

a.the market power of the OPEC

b.none of the above

c.the stable climate as a public good

d.the negative externalities of greenhouse gas emissions

Which of the following would result in a movement along the demand curve?

a. an increase in the prices of inputs in production

b.a change in preferences

c.an increase in the price of a substitute in consumption

d.a decrease in income

Suppose the price of barley increases by 8.3%. If breweries buy 3.2% less barley after the price increase, the total revenue for barley producers will ________ because the ________ effect is greater than the ________ effect.

a.increase; price; quantity

b.not change; quantity; price

c.decrease; quantity; price

d.increase; quantity; price

Answer 1

Answer 1 = correct option is C

Reason = Stable climate as a public good is not a major concern in case of greenhouse gas emissions and climate change, rather change in climate is major a concern in case of greenhouse gas emissions

Answer 2 - none of the above

Reason - all the options given will cause shift in demand curve rather then movement along demand curve . Movement along demand curve occurs only when there is change in quantity due to change in price of that product. Here, none of the option shows price of the commodity therefore all of fhem will not cause movement along demand curve.

Answer 3 ,- correct option is A

Reason = since effect of change in price is greater than change in quantity which means demand is inelastic, therefore total revenue for barley producers will increase because price effect is greater than quantity effect