Which of the Following Statements Is Not True

question 177

Multiple Choice

Which of the following statements is not true?

• A)In the presence of a market failure, government action will always improve on the market outcome.
• B)In the presence of a market failure, government action can sometimes improve on the market outcome.
• C)In the presence of a market failure, government action might not improve on the market outcome because some leaders are not fully informed about the effects of their actions.
• D)In the presence of a market failure, government action might not improve on the market outcome because sometimes public policies simply reward the politically powerful.

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Definitions:

Consumer Surplus

The divergence between anticipated consumer expenditure on a good or service and the actual expenditure.

Surplus II

An excess of production or supply over demand, leading to potential wastage or decrease in prices.

Total Surplus

The total benefits society gains, encompassed by the addition of consumer surplus and producer surplus within a market.

Consumer Surplus

The variation between the sum consumers are willing to allocate for a good or service and the sum they actually allocate.