Which one of the following is an example of market failure?
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An optimist is trying to get a job as a CEO. Her constant optimism is well-known to everyone: she always believes that the probability of a good outcome is higher than it actually is. Which of the following firms should hire her?
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Let's suppose that Catherine just lost her job and found a new one right away but at a lower wage rate. Based on the neoclassical theory for labor supply, the substitution effect of the lower wage for Catherine will lead her to:
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In this diagram, you can see the Gini coefficient for all individuals in the world (one of the lines, let's call it global inequality) and the Gini coefficient for all individuals as if income distribution within countries were perfectly equal (the other line, let's call it between-countries inequal
