Asked by Cameron Lopez on Jun 26, 2024
Verified
When markets fail:
A) government intervention may help.
B) the market realizes the maximum possible gains from trade given the available resources.
C) there may still be an efficient allocation of resources.
D) no goods and services are produced.
Government Intervention
Actions taken by a government to affect or interfere with market activities or uphold laws for economic or social outcomes.
Markets Fail
Occurs when a market economy does not efficiently allocate resources, leading to outcomes like monopolies, public goods issues, or externalities.
Efficient Allocation
The distribution of resources in a way that maximizes the net benefits to society or the economy.
- Identify the significance of state intervention in rectifying market shortcomings and securing efficient outcomes.
- Discern the conditions conducive to the breakdown of markets and the function of policy-making in remedying these failures.
Verified Answer
Learning Objectives
- Identify the significance of state intervention in rectifying market shortcomings and securing efficient outcomes.
- Discern the conditions conducive to the breakdown of markets and the function of policy-making in remedying these failures.
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