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Homework answers / question archive / The term used to describe a situation in which markets do not allocate resources efficiently is: A) economic meltdown, B) market failure, C) equilibrium, D) the effect of the invisible hand
The term used to describe a situation in which markets do not allocate resources efficiently is:
A) economic meltdown,
B) market failure,
C) equilibrium,
D) the effect of the invisible hand.
The answer is the term used to describe a situation in which markets do not allocate resources efficiently is called B)marketfailureB)marketfailure.
The cigarette market did not include damage to people's health done by smoking. These health effects are a negative externality not addressed in the market price of cigarettes. When not all resources involved in producing and using a product are in the market price, there is market failure.
