Governments choose to mandate participation in a program,like auto insurance,when:
A) the functioning of those markets is thought to be in the public interest.
B) the market would not otherwise exist.
C) the market would exist illegally.
D) None of these statements is true.

Question

Quizplus · Accepted Answer

Governments choose to mandate participation in a program, like auto insurance, when the functioning of those markets is thought to be in the public interest. For example, mandatory auto insurance ensures that drivers are financially responsible in case of accidents, thereby protecting the public from the costs of damage and injury. Mandates are typically imposed when there are externalities, information asymmetry, or other market failures that warrant government intervention to improve market outcomes.

Governments Choose to Mandate Participation in a Program,like Auto Insurance,when