What Is a Market Failure

question 14

Multiple Choice

What is a market failure?

• A)It refers to the inability of the market to allocate resources efficiently up to the point where marginal social benefit equals marginal social cost.
• B)It refers to the inability of the market to allocate resources efficiently up to the point where marginal social benefit equals marginal private cost.
• C)It refers to a situation where an entire sector of the economy (for example, the airline industry)collapses because of some unforeseen event.
• D)It refers to a breakdown in a market economy because of widespread corruption in government.

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Definitions:

Aerobic Exercise

Physical activity that relies on the oxygen to generate energy, improving cardiovascular conditioning.

Life Expectancy

The average period that an individual is expected to live as determined by statistical analysis, often influenced by factors such as genetics, lifestyle, and healthcare quality.

Sympathetic Nervous System

Part of the autonomic nervous system that prepares the body for rapid response to stressful or emergency situations by activating the fight-or-flight response.

Social Support

Assistance and comfort received from friends, family, and acquaintances, contributing to an individual’s emotional and physical health.