Which of the Following Is NOT a Reason for Government

question 16

Multiple Choice

Which of the following is NOT a reason for government intervention in markets?

• A) Public goods
• B) Externalities
• C) Uncertainty
• D) Income redistribution

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Definitions:

Output Q₃

A specified level of output or production, often denoted as Q₃ to represent a particular point on a supply or production curve.

Diseconomies of Scale

The phenomenon where increasing production leads to an increase in the average costs of production, opposite of economies of scale.

Economies of Scale

The cost advantages that enterprises obtain due to size, output, or scale of operation, with cost per unit of output generally decreasing with increasing scale.

Constant Returns to Scale

The condition where increasing all inputs by a certain factor leads to an increase in output by the same factor, indicating linear scalability in production processes.