Which of the following statements about the way markets allocate resources is most accurate from society's perspective?
A) The market always allocates resources in the best way.
B)
The market may not always allocate resources in a way that is not in society's best interest.
C) Resource allocation by markets may not be perfect, but it is always better than government allocation of resources.
D) Markets always fail to allocate resources properly, so we must rely on the government to determine the

Question

Quizplus · Accepted Answer

While markets are often efficient at allocating resources, there are situations where they may not do so in a way that is in society's best interest. For example, markets may underinvest in public goods or overproduce negative externalities. It is therefore important for government intervention or regulation to ensure that markets allocate resources in a way that maximizes societal welfare. Choice C is an overstatement as government intervention can sometimes improve resource allocation, and choice D is incorrect as markets are not always inefficient.

Which of the Following Statements About the Way Markets Allocate