ch7

1.How do we know that the equilibrium in a perfectly competitive market is efficient?

It becomes efficient once it meets two important conditions, which are allocative efficiency and productive efficiency

2.What is the problem that arises when there is market failure and how do we measure it?

Inefficient distribution of goods and services can cause the market to crash, and when supply and demand don't reach.

They can prevent it by making competition to push entrepreneurs and consumers to push the market, Tariffs, trade restrictions, price ceilings, and floors.

Ch 8 1.What is the difference between absolute and comparative advantage? Which is more important in terms of your decision-making?

Absolute advantage is when a country or a market produces more quantity at a lower cost service or product Comparative advantage is the ability is able to produce goods at lower opportunity than others.

I think Comparative advantage is more important in a decision-making wise since you can do it at a less opportunity cost. 2.Is it possible for someone to have the absolute advantage in every available task? Can someone have the comparative advantage in every task?

No, because there is no opportunities cost in the absolute advantage. No, because there would be less quantity than absolute advantage.

3.Suppose the study rooms in the library are always full during exam time. How could GGC implement an internal market to allocate time in the study rooms? Why might this approach be better than a first-come-first-served approach?

I think it allows everyone to have an opportunity, and it also prevents abuse of the system