chapter  16
24 Pages

Answers to selected progress check and review questions

He should continue in his current job, which gives a higher NPV. 1E [Omitted.] 1F The three branches are: (i) competitive markets; (ii) market power; and (iii) imperfect

markets. Competitive markets have large numbers of buyers and sellers, none of which can influence market conditions. By contrast, a buyer or seller with market power can influence market conditions. A market is imperfect if one party directly conveys benefits or costs to others, or if one party has better information than another.