When There Is Market Failure

question 21

Multiple Choice

When there is market failure

• A)Government intervention is always beneficial.
• B)A laissez-faire approach is the best policy.
• C)Government intervention is beneficial only in the case of natural monopolies.
• D)Government intervention is beneficial only when the marginal benefit of intervention exceeds the marginal cost.

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Definitions:

Future Benefit

An economic advantage or return that is expected to be received in the future as a result of current or past actions.

Asset

A resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide future benefit.

Entity's Activities

Operations or actions undertaken by an entity, which can include its core business operations, investments, financing, and other actions that it engages in.

Owners' Equity

The residual interest in the assets of a business after deducting liabilities, representing the ownership interest of shareholders or owners.