From the list below distinguish the true statements from the false statements. a. Market failure occurs when positive

Question

From the list below distinguish the true statements from the false statements. a. Market failure occurs when positive externalities are present, but not when negative externalities are present. b. Market failure is when market provision of a good results in an inefficient quantity. c. Market failure occurs when negative externalities are present, but not when positive externalities are present. d. Market failure occurs when either negative or positive externalities are present. e. Government sometimes intervenes when market failure occurs. f. Externalities are the only example of market failure.

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a. Market failure occurs when positive externalities are present, but not when negative externalities are present .This is true, but no corrective action is needed. b. Market failure is when market provision of a good results in an inefficient quantity. Yes, this is a true statement. c. Market failure occurs when negative externalities are present, but not when positive externalities are present. This is false. Market failure still exists with positive externalities; but it is not corrected. d. Market failure occurs when either negative or positive externalities are present. This is true as above. e. Government sometimes intervenes when market failure occurs. This is a true statement. f. Externalities are the only example of market failure. This is false. There are also failures in abuse of market power, inequality, and public goods.

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From the list below distinguish the true statements from the false statements

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Archived Solution

a. Market failure occurs when positive externalities are present, but not when negative externalities are present	.This is true, but no corrective action is needed.
b. Market failure is when market provision of a good results in an inefficient quantity.	Yes, this is a true statement.
c. Market failure occurs when negative externalities are present, but not when positive externalities are present.	This is false. Market failure still exists with positive externalities; but it is not corrected.
d. Market failure occurs when either negative or positive externalities are present.	This is true as above.
e. Government sometimes intervenes when market failure occurs.	This is a true statement.
f. Externalities are the only example of market failure.	This is false. There are also failures in abuse of market power, inequality, and public goods.