When There Is Reason to Think That the Existing Structure

question 82

Multiple Choice

When there is reason to think that the existing structure of incentives will cause individuals in the market to act in ways that are inconsistent with ideal economic efficiency, economists say that

• A) market failure is present.
• B) democratic political decision-making will lead to the ideal efficient outcome.
• C) government action, however well intended, cannot improve the situation.
• D) government failure is present.