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.

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Definitions:

Economically Inefficient

A situation where resources are not allocated in a way that maximizes the total benefit to society, often resulting in wasted or misallocated resources.

Voter Failure

A situation where voters are uninformed or make irrational decisions, leading to outcomes not reflecting the true preferences of the majority.

Allocative Efficiency

A state of the economy in which production represents consumer preferences; every good or service is produced up to the point where the last unit provides a utility level equal to the cost of producing it.

Productive Efficiency

A situation where the economy or an economic system operates in a way that it cannot produce more of one good without affecting the production of another good.