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.
b
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If General Motors cuts back production on the Hummer because of high gasoline prices what should you expect to happen to the average fixed cost of production? What about the average total cost?
What will be an ideal response?
Consider the following two cases. In the first, a U.S. firm purchases 18% of a foreign firm. In the second, a U.S. firm builds a new production facility in a foreign country
Both are ________, with the first referred to as ________ and the second as ________. A) foreign direct investment (FDI) outflows; greenfield; brownfield B) foreign direct investment (FDI) inflows; greenfield; brownfield C) foreign direct investment (FDI) outflows; brownfield; greenfield D) foreign direct investment (FDI) inflows; brownfield; greenfield E) foreign direct investment (FDI); inflows; outflows
In the 1960s and 1970s the U.S. passed several major consumer safety laws, including the Flammable Fabrics Act and the Child Protection Act. The economic impact of such legislation may include all of the following except:
a. reducing the price of the regulated product. b. increasing the cost of producing the regulated product. c. reducing the supply of the regulated product. d. reducing competition within the regulated industry.
People cope with uncertainty about the future:
A. exactly the same way, regardless of the situation. B. in very similar ways, regardless of the situation. C. in many ways, such as buying insurance. D. by always avoiding it.