Asked by Doreen Oduro-Nyarko on May 11, 2024
Verified
Which statement(s) is/are TRUE about market failures? I.They arise when property rights are clearly defined.
II.They arise when information is available to all decision makers.
III.They arise when external costs are not considered in production decisions by producers.
A) I
B) I and II
C) III
D) I,II,and III
Market Failures
Situations where the allocation of goods and services by a free market is not efficient, often leading to a loss of economic value.
Property Rights
Legal rights to possess, use, and dispose of assets, including real property or intellectual property, ensuring control and economic benefits to the rights holder.
External Costs
Costs of a transaction or activity that affect parties who are not directly involved in it, such as pollution affecting the wider community.
- Identify the circumstances leading to market failures and their effects on surplus.
Verified Answer
Learning Objectives
- Identify the circumstances leading to market failures and their effects on surplus.
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