When There Is Reason to Think That the Existing Structure

question 82

Multiple Choice

When there is reason to think that the existing structure of incentives will cause individuals in the market to act in ways that are inconsistent with ideal economic efficiency, economists say that

• A) market failure is present.
• B) democratic political decision-making will lead to the ideal efficient outcome.
• C) government action, however well intended, cannot improve the situation.
• D) government failure is present.

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Definitions:

Employee Hours

The total number of hours worked by employees, often used for tracking labor costs, productivity, or workforce planning.

Space Occupied

Refers to the physical area taken up or used by an object, individual, or operation within a given environment.

Step-Down Method

A cost allocation method used in cost accounting to distribute overhead costs to various cost objects based on a hierarchy.

Service Department

A division within a company that provides supportive services to other internal departments or production units.