What role can the government play in correcting problems of imperfect information?
What will be an ideal response?
The government can create laws requiring that the truth about products be told. These laws can also require the disclosure of information. The government may also try to provide the information itself to its citizens.
You might also like to view...
Which of the following statements is true?
A) Maximum social surplus implies equity. B) Pareto efficiency implies equity. C) Taxation causes redistribution of wealth among the members in a society. D) Market prices act as signals that result in equal distribution of income and wealth in the society.
The store of value does not require that money hold its value of time in terms of its purchasing power
Indicate whether the statement is true or false
Explain how the following apparently contradictory statement can be true: Most spells of unemployment are short, and most unemployment observed at any given time is long-term
In a free-market economy, a product that entails a negative externality (additional social cost) will be
A. produced at the optimal level. B. underproduced. C. overproduced. D. provided solely by the government.