Does government intervention guarantee provision of the socially optimum quantity of a public good? Explain
No. It does not, because government failure can occur. Government decision- makers (including voters)
may make choices that are self-serving or that serve only narrow special interest groups.
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A market system is not considered an effective way of controlling self-interest
a. True b. False Indicate whether the statement is true or false
Which of the following is true?
A) Entrepreneurs generally save less of their income than other Americans. B) If you want to make a lot of money, you had better figure out how to provide others with substantial value and find ways to discover and act on strategic opportunities. C) Additional years of schooling will substantially increase your earnings even if they fail to increase your productivity and ability to provide others with things that they value. D) Most entrepreneurs work very few hours.
Your local grocery store reduces transaction costs to the consumer
A) by reducing the consumer's need to travel from food producer to food producer (or manufacturer to manufacturer) to purchase the food staples that the consumer desires. B) by providing a system that directs funds from lenders to borrowers. C) by providing a system of justice to enforce contracts. D) All of the above are correct.
Explain what is likely to happen to the rate of mortgage loan default given the following: "For years home values across the country have increased on average 3 to 4% percent each year. Mortgage lenders have come to expect this to always be the case and so begin to offer mortgages with little to nothing down and not requiring PMI insurance. An economic slowdown occurs hitting a few areas of the country harder than others. Home values across the country begin to decrease with some areas seeing decreases of as much as 10%."
What will be an ideal response?