Market Failure Implies That the Market Mechanism

question 101

Multiple Choice

Market failure implies that the market mechanism

• A)Leads the economy to a point outside the production possibilities curve.
• B)Leads the economy to the wrong mix of output.
• C)Causes shortages or surpluses in the market.
• D)Causes government failure.

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Definitions:

External Validity

The extent to which the findings from a study can be generalized to other people, other settings, and other time periods.

Placebo

An inactive substance or treatment given to a participant in a study, used to test the efficacy of a therapy or medication.

Accomplices

Individuals who actively assist, facilitate, or encourage another person in the commission of a crime, without necessarily taking part in the actual criminal act.

Perceptual Judgments

The process of interpreting sensory information to make meaningful assessments about one's environment.