Which of the Following Does Not Indicate Market Failure

question 14

Multiple Choice

Which of the following does not indicate market failure?

• A)Existence of monopolies.
• B)Excessive air and water pollution.
• C)A lack of such necessities as national defense.
• D)Insufficient levels of research and development expenditures.
• E)Severe income inequalities.

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Definitions:

Marginal Productivity Theory

An economic theory suggesting that payment to factors of production equals the value of their marginal contribution to the production process.

Equilibrium Value

The price at which the quantity of goods supplied is equal to the quantity of goods demanded in a market.

Factor Of Production

Inputs employed in the production of goods and services, typically classified as land, labor, capital, and occasionally entrepreneurship.

Average Product

The output per unit of input, such as labor or capital, used in the production process.