Which of the Following Is a Source of Market Failure

question 179

Multiple Choice

Which of the following is a source of market failure?

• A)unforeseen circumstances which leads to the bankruptcy of many firms
• B)a lack of government intervention in a market
• C)incomplete property rights or inability to enforce property rights
• D)an inequitable income distribution

---

Definitions:

Foreclosure

A legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments, typically by forcing the sale of the asset used as the collateral for the loan.

Default Judgment

A binding judgment in favor of either party based on some failure to take action by the other party, typically when the defendant does not respond to a summons or fail to appear in court.

Mortgage

A contractual arrangement where a bank or lender provides funds at an interest rate, securing the loan by assuming ownership of the borrower's property, which reverts back to the borrower once the loan is fully repaid.

Restrictive Covenant

A clause in a contract that limits certain actions of the parties involved, often to protect business interests.