week1-b

Q1. While defining the concept of market efficiency, briefly describe the theoretical basis for measuring efficiency under a perfectly competitive market

Q2. What are the sources of market failure? Provide a real-world example.

Q3. What is the rationale for government intervention in economic and market activities?

Q4. Briefly describe the causes of the Great Depression of the 1930s.

Q5. What is Keynesian economics? How did it combat the Great Depression of the 1930s? Hint: it is not necessary to mention any technical aspects of the model.

Q6. In your own opinion, provide at least two pros and two cons of government intervention in a free market system with examples.

Q7. How do you distinguish between the concepts of the D and S functions in microeconomics and the concepts of the AD and AS functions in macroeconomics? Why they are different?

Q8. Briefly explain how the problem with information asymmetry caused the financial collapse on Wall Street and financial trouble in the health-care service industry. Provide an example for each of these cases.

Q9. From your own real-life experience, provide an example of adverse selection and its possible moral hazard. How would it be possible to avoid or at least minimize the problem of adverse selection and moral hazard?

Q10. Make a list of the pros and cons of the individual mandate of Obamacare.