Which of the following statements is not true?
A)In the presence of a market failure, government action will always improve on the market outcome.
B)In the presence of a market failure, government action can sometimes improve on the market outcome.
C)In the presence of a market failure, government action might not improve on the market outcome because some leaders are not fully informed about the effects of their actions.
D)In the presence of a market failure, government action might not improve on the market outcome because sometimes public policies simply reward the politically powerful.

Question

Quizplus · Accepted Answer

While government action can sometimes improve on the market outcome in the presence of market failure, it is not always the case that government intervention will improve the situation. There may be situations where government action could make things worse or have unintended consequences. Therefore, it is not true that government action will always improve on the market outcome in the presence of market failure.

Which of the Following Statements Is Not True