When Markets Fail, Public Policy Can

question 301

Multiple Choice

When markets fail, public policy can

• A)do nothing to improve the situation.
• B)potentially remedy the problem and increase economic efficiency.
• C)always remedy the problem and increase economic efficiency.
• D)in theory, remedy the problem, but in practice, public policy has proven to be ineffective.

---

Definitions:

Masking Stimuli

A process in which the perception of one stimulus (the mask) interferes with the perception of another stimulus, reducing its recognizability.

Context Effects

The influence of environmental factors on one's perception of a stimulus, demonstrating how context can shape and influence decision making and judgment.

Subliminal Sensation

A perception of stimuli that occur below the threshold of conscious awareness.

Transduce

The process of converting one form of energy into another, as in sensory systems converting physical stimuli (e.g., light, sound) into neural signals.