Government Programs Can Achieve Efficiency When the Gains to Gainers

question 28

True/False

Government programs can achieve efficiency when the gains to gainers from those policies exceed the losses to those who bear the costs.

---

Definitions:

Corrective Taxes

Taxes designed to correct the effects of negative externalities, often imposed to encourage or discourage certain behaviors.

Social Optimum

A state in which resources are allocated in the most efficient way from the perspective of society as a whole.

Economic Efficiency

A state where all resources in an economy are optimally allocated to serve each individual or entity in the best way while minimizing waste and inefficiency.

Transaction Cost

Expenses incurred when buying or selling goods or services, including fees, taxes, and other charges.