ECONOMICS
MARKET FAILURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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a wide variety of goods and services will be produced
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resources will only be employed if it is profitable to do so
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firms will only supply products to consumers who are most able to pay for them
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there are very few, if any, taxes and regulations
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Detailed explanation-1: -Notable benefits of a market economy are increased efficiency, production, and innovation.
Detailed explanation-2: -The advantages of a market economy are many. Competition insures greater quality and lower prices for consumers. Individuals are encouraged to take business risks to further their own economic interests, which benefit the economy as a whole.
Detailed explanation-3: -A free market is characterized by privately owned resources, financial institutions, the freedom to participate, self-interest, and competition. Advantages of this market system include efficient resource allocation, competition, innovation, and product variety.
Detailed explanation-4: -In a free market economy, business owners enjoy the freedom to come up with new ideas based on the consumers’ needs. They can create new products and offer new services at any time they want to. As such, entrepreneurs rarely rely on government agencies to notify them of consumers’ needs.