Asked by Santiago Quirós on Jun 09, 2024
Verified
The term government failure refers to the
A) large losses suffered by publicly owned water, gas, and electric companies.
B) large number of bankruptcies that have occurred recently among local governments.
C) economically inefficient outcomes caused by voting problems or incentive structures in government.
D) inability of government agencies to provide adequate police protection in low-income neighborhoods.
Government Failure
Occurs when government intervention in the economy causes more harm than good, leading to inefficient allocation of resources or failing to achieve desired policy outcomes.
Economically Inefficient Outcomes
Situations where resources are not allocated optimally, leading to wasted potential or benefits.
Incentive Structures
Systems or processes designed to motivate individuals to perform certain actions by offering rewards or punishments.
- Explain the phenomena of government failure and the conditions that lead to economically inefficient outcomes.
Verified Answer
CG
Cassandra GuzmánJun 15, 2024
Final Answer :
C
Explanation :
Government failure occurs when the actions of government result in outcomes that are economically inefficient, often due to problems with voting systems or the incentive structures within governmental organizations. This can lead to resources being allocated in ways that do not maximize societal welfare.
Learning Objectives
- Explain the phenomena of government failure and the conditions that lead to economically inefficient outcomes.