Which of the Following Is the Best Example of a Supply-Side

question 94

Multiple Choice

Which of the following is the best example of a supply-side market failure?

• A) No one provides street lights in a town because, once the lights are in operation, people don’t have to pay to use them.
• B) A firm keeps its production costs down by dumping its waste in the nearby river, adversely affecting water quality for residents in the area.
• C) Government imposes taxes on the production of a socially desirable good.
• D) Street performers don’t get full payment for the value of their output because people watch and enjoy the shows without paying the artist.

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Definitions:

Hard Currencies

are globally traded currencies that are widely accepted for trade and investment, considered strong and stable.

Barter System

An economic system where goods and services are exchanged directly for other goods and services without using money as a medium.

Trade Deficit

A situation where a country's imports of goods and services exceed its exports, leading to a negative balance of trade.

Infrastructure

Basic systems of communication, transportation, and energy facilities in a country.