When Markets Fail

question 129

Multiple Choice

When markets fail:

• A)government intervention may help.
• B)the market realizes the maximum possible gains from trade given the available resources.
• C)there may still be an efficient allocation of resources.
• D)no goods and services are produced.

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Definitions:

Altruistic Motives

Altruistic motives are actions or behaviors driven by the desire to help others without expecting personal gain.

Consumer Good

Goods that are produced for personal consumption by the general public.

Inelastic

Describing demand that is relatively unresponsive to changes in price.

Quantity Demanded

This is the total amount of a good or service that consumers want to buy at a specific price level, within a certain period.