Answer to Question #225904 in Microeconomics for Devil

Question

(a) Define market failure and its causes. 

 (b) What is comparative theory of international trade explain. 

 (c) Define Economic Rent & show different situations of economic rent.

Answer 1

a)Market failure is when it becomes impossible for an industry to become perfect because of its market structure. This comes as a result of lacking public goods, negative externalities and monopoly power abuse.

b) The comparative theory tends to introduce the opportunity cost as an analysis aspect in identifying within several options for productivity.

c)Economic rent tends to be the income that has been derived from control or ownership over limited resource or asset.