Markets Fail to Allocate Resources Efficiently When

question 25

Multiple Choice

Markets fail to allocate resources efficiently when

• A) prices fluctuate.
• B) people who have property rights abuse their privileges.
• C) property rights are poorly enforced or not well established.
• D) the government refuses to intervene in private markets.

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Definitions:

Demand Curve

A graph depicting the relationship between the price of a good and the quantity demanded by consumers at those prices.

Per-Unit Burden

The cost or burden imposed on each unit of a good or service, often in the context of taxes or subsidies.

Artificially-Sweetened Beverages

Drinks that contain synthetic sweetening agents instead of natural sugars to provide sweetness with fewer or no calories.

Equilibrium Price

The price at which the quantity of a good supplied is equal to the quantity demanded, leading to market stability.