Market Failure Occurs When the Pursuit of Self-Interest Leads to Bad

question 145

True/False

Market failure occurs when the pursuit of self-interest leads to bad results for society.

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Definitions:

Fundamental Attribution Error

The tendency to overemphasize personal characteristics and underestimate situational factors when explaining other people's behavior.

Prejudice

Preconceived opinion or judgment about someone or something that is not based on reason or actual experience.

External Attributions

The process of attributing the cause of behavior to situational factors outside a person.

Lowball Technique

A persuasive tactic in which an initially favorable offer is made, but then terms are changed to be less favorable once initial commitment is achieved.