Efficient government intervention requires that ________.

Question

Quizplus · Accepted Answer

Efficient government intervention occurs when the marginal benefits of intervention are just equal to the marginal costs of intervention. This means that the benefits generated from the intervention should not exceed the costs, nor should the costs exceed the benefits. Maintaining this balance ensures that resources are used effectively and without waste. Choice A is incorrect because the cost of government enforcement cannot be zero, as resources must be used to implement any intervention. Choice C is incorrect because it may not be practical or necessary for all negative externalities to be eliminated. Choice D is incorrect because there may be productivity losses in the private sector as a result of government intervention, but efficiency requires that the benefits of the intervention outweigh any losses.

Efficient Government Intervention Requires That ________