An Analysis of Market Failure and Government Failure Indicates

question 180

Multiple Choice

An analysis of market failure and government failure indicates

• A) government decision making is always preferable to using markets.
• B) market decision making is always preferable to public-sector action.
• C) government action is necessary whenever market failure occurs.
• D) both the market and the government may fail to meet conditions of economic efficiency; in each individual case, the choice of market or public-sector action requires careful evaluation.

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Definitions:

Closed System

A system that does not interact with its environment and does not exchange matter or energy with the outside.

Disinfectant

A chemical substance used to eliminate or inhibit the growth of harmful microorganisms.

Prefix

A syllable or word placed at the beginning of another word to alter its meaning.

Dis-

A prefix used to denote negation, removal, or expulsion.