Question

A. Everyone benefits from street lighting, yet the marginal benefit to any one individual usually falls short of the marginal cost.
B. This is an example of Individual actions that have side effects that are not properly taken into account by the market.
C. One party preventing beneficial trades from occurring in an attempt to capture a greater share of resources for itself.
D. Some goods unsuitable for efficient management by markets.
E. None of the above.

True of False

Answer 1

Answer:

The correct answer is D. Some goods unsuitable for efficient management by markets.

Explanation:

In economics, the price system of a competitive market is capable of supplying all the goods and services of an economy. However, there are some situations where this is not possible, these are known as market failures.

For example, street light and a city's sewer are market failures. It is not profitable for a company to dedicate itself to lighting in the street, because it would invest a lot of money but nothing would come in and in the end it would fail. Therefore, the government is responsible for performing these tasks, covering market failures.