Failure of Market Outcomes Occurs When

question 85

Multiple Choice

Failure of market outcomes occurs when:

• A) there are market failures such as externalities.
• B) there are no market failures but the market is not achieving society's goals.
• C) the market outcome is not efficient.
• D) the market outcome is not Pareto optimal.

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Definitions:

Economic Efficiency

A situation in which it is not possible to improve overall economic welfare by reallocating resources amongst individuals, implying no waste is occurring.

Deregulated Industry

An industry where government restrictions on business operations, such as price controls and market entry, have been reduced or eliminated.

Pork-Barrel Politics

involves government spending for localized projects secured primarily to bring money to a representative's district, often criticized as wasteful or aimed at gaining political favor.

Comprehensive Legislation

refers to wide-ranging laws or legal provisions that address multiple aspects of a particular issue or regulatory area.