SSC
GENERAL ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A situation in which goods are not fairly distributed
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welfare
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market failure
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cash transfers
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public policy
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Explanation:
Detailed explanation-1: -Ben cannot afford to buy a high-end Mercedes Benz luxury car. Market failure is caused by the action of buyers or sellers who act rationally but consume or produce less than optimal outcomes. Ben cannot afford a luxury car; this car is out of his budget constraint; hence it is not a condition of market failure.
Detailed explanation-2: -The most common example of market failure of public goods is called the ‘free-rider problem’ which occurs when there are too many non-paying consumers. If the public good is provided by private companies, the supply costs can become too high for the company to continue providing them.
Detailed explanation-3: -Traffic. Litter. Obesity. Air Pollution. Smoking Pollution.
There is 1 question to complete.