What Is a Market Failure

question 14

Multiple Choice

What is a market failure?

• A)It refers to the inability of the market to allocate resources efficiently up to the point where marginal social benefit equals marginal social cost.
• B)It refers to the inability of the market to allocate resources efficiently up to the point where marginal social benefit equals marginal private cost.
• C)It refers to a situation where an entire sector of the economy (for example, the airline industry)collapses because of some unforeseen event.
• D)It refers to a breakdown in a market economy because of widespread corruption in government.

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Definitions:

Skilled Workers

Skilled workers are individuals who have specialized training, knowledge, and expertise in specific fields or professions, often requiring formal education and experience.

Foreign Aid

Financial or other assistance provided by one country to another to help with economic development, social welfare, disaster relief, etc.

Dependency

A reliance on someone or something else for support or the proportion of non-working population to the working population.

Private Capital Flows

Financial resources that are invested in a country by private sector entities from other countries, including investments in equity, debt, and property.