Depict on a graph a perfectly competitive market with a negative externality. Utilise the graph to cleary highlight and discuss the problems associated with the negative externality.[hint: focus on the quantity difference between the market equilibrium and the socially desirable equilibrum] now consider what happens if the market consolidates and becomes a monopoly (there is no need to depict this on a graph). Do you think the obesity and diabetes will increase or decrease? [hint: focus on the quantity difference betweeen a monopoly and perfectly competitive market]

What are the features of a perfectly competitive market? Give two examples of competitive markets. How could a firm in such a market move to a less competitive market?

Define Weak, Semi-Strong and Strong forms of the Efficient Market Hypothesis (EMH).   a. How would you construct a test of the Weak form of the EMH? b. What have researchers found when testing the Weak form of the EMH? c. Outline how you would conduct an event study. What efficient market hypothesis are you trying to test? d. Give an example where researchers have used an event study and what did they find? Was it consistent with the EMH?

Select all that are true with respect to the theory of market efficiency. Group of answer choices If markets are efficient, investors cannot earn positive returns If markets are efficient, it means prices are always "right" in that the reflect perfect foresight into what will happen in the future Strong form market efficiency suggests that all information, public or private, is reflected in current prices in an unbiased way Market efficiency suggests that relevant information is quickly impounded into prices If transaction costs are high, then prices are less likely to reflect all available information