Topic Market failure, Difficulty M, Type RE, Answer c Which of the following is not an example of market failure?

Figure 9-2

When an economy is experiencing the aggregate demand and supply conditions depicted in ,
a.
the actual rate of unemployment will exceed the natural rate of unemployment.
b.
buyers and sellers will have correctly anticipated the level of prices P₁.
c.
the output y₁ will not be sustainable in the future.
d.
all of the above are correct.

In graphical form,the effect of imposing a tax on a good is shown as

A) a leftward shift of the market supply curve. B) a rightward shift of the market supply curve. C) a downward movement along the market supply curve. D) no change to the market supply curve.