Some would cite the purchase of defective products and the rising cost of health care as market failures. Argue that these are not true market failures
If one had perfect information, one would never willingly purchase a defective product. In actuality, information is a scarce good, and one should obtain an optimal amount, which will fall short of perfect information. Occasionally, one will purchase a toy that doesn't work properly or a car that leaves something to be desired. Insurance, money-back guarantees, and the like are there (at a price) to reduce the risk of the unknown.
Health care suffers from the cost disease of the service industries, whereby labor-intensive products are less able to take advantage of technological advances. Their costs rise faster than product prices in general. (That is not to say that medical monopolies do not contribute to high health costs.)
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a. true b. false
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