The basic principles of economics suggest that
A)markets are seldom, if ever, a good way to organize economic activity.
B)government should become involved in markets when trade between countries is involved.
C)government should become involved in markets when those markets fail to produce efficient or equitable outcomes.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

The basic principles of economics suggest that markets are generally efficient and will produce optimal outcomes in most situations. However, there can be cases where markets fail to produce efficient or equitable outcomes, such as in cases of externalities or market power. In these cases, it may be appropriate for the government to become involved in markets to correct these failures and promote greater efficiency and fairness. This is the reasoning behind choice C, which suggests that government should become involved in markets when those markets fail to produce efficient or equitable outcomes. Choices A and B are not accurate because they suggest a more interventionist role for government in markets than is generally considered appropriate by economists.

The Basic Principles of Economics Suggest That