Explain what is meant by the term coordination failure and provide an example
What will be an ideal response?
This is a state of affairs in which agents are unable to coordinate their efforts, and hence end up in an equilibrium that leaves them worse off than they would be if they were able to coordinate. There are several examples offered in the text, or the students may come up with their own.
Economics
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In the figure above, what is Gap's excess capacity?
A) 32 jackets per day B) zero C) 4 jackets per day D) 132 jackets per day
Economics
Money supply M1 does not include the currency held by:
A. Households in their wallets or purses B. Business firms C. Commercial banks D. State and local governments
Economics