1. True or False The broken window fallacy states that when a window breaks and
ID: 1173020 • Letter: 1
Question
1. True or False The broken window fallacy states that when a window breaks and someone spends money to repair it, they have created new economic activity that would not have otherwise taken place. 2. The price of diamonds is high, in part because the majority of the world's diamonds are controlled by a single firm. This is an example of a. a market failure caused by market power. b. a market failure caused by an externality. c. a market failure caused by equality. d. There is no market failure in this case. 3. True or False Variations in the standard of living across countries is due almost entirely to differences in each nation's total output of goods and services. 4. True or False A technological advance in the production of the first good increases the opportunity cost of the first good in terms of the second good.Explanation / Answer
1.)) TRUE
2.)) A. a market failure caused by market power
3.)) FALSE
4.)) TRUE
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