Markets Fail to Allocate Resources Efficiently When

question 37

Multiple Choice

Markets fail to allocate resources efficiently when

• A)demanders and suppliers cannot agree on a price.
• B)goods are rival in consumption and excludable.
• C)property rights are not well established.
• D)too many buyers and sellers exist in the same market.

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Definitions:

Insurable Interest

The financial interest that a policyholder has in the person or property that is insured.

Life Insurance

An insurance contract that provides monetary compensation for losses suffered by another’s death.

Beneficiary

A third party receiving benefits from a contract made between two other parties. Also, the person named in an insurance policy to receive benefits paid by the insurer in event of a claim.

Fire Insurance Policy

A contract that provides coverage against losses or damages caused by fire to property.