Government Failure Occurs When

question 255

Multiple Choice

Government failure occurs when

• A) the incentives of government policymakers are not aligned with the public interest.
• B) public policies bring about an optimal allocation of resources.
• C) government regulation increases positive externalities.
• D) property rights can be enforced with minimum transaction costs.

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Definitions:

Rancher

A person who owns or manages a ranch, where livestock such as cattle or sheep are raised for meat or wool.

Production Possibilities

A curve depicting all maximum output possibilities for two goods, given a set of inputs consisting of resources and other factors.

Opportunity Cost

Forgoing possible gains from alternative paths when one path is chosen.

Farmer

An individual engaged in agriculture, raising living organisms for food or raw materials.