If Government Failure Did Not Exist

question 49

Multiple Choice

If government failure did not exist,

• A)Laissez faire would apply to all markets.
• B)Deregulation would be unnecessary.
• C)The invisible hand would be the most efficient and equitable way to run the economy.

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Definitions:

Efficient Use of Resources

An economic condition where resources are allocated in the most effective manner possible to meet the needs and desires of consumers.

Long-Run Equilibrium

A state in which all firms in a market or industry are making normal profits and there is no incentive for firms to either enter or exit the market.

Price

The monetized value required, forecasted, or offered in return for a service or good.

Marginal Cost

The increase in total cost that arises from an extra unit of production, focusing on the cost variation from an additional output.