Statement I.Market failure rarely happens under capitalism.
Statement II.One remedy for market failure is public goods and services.

A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false.

Question

Stefany Ramirez · Accepted Answer

Final Answer : B, Explanation :  Market failure can and does happen under capitalism, as it is based on the assumption that markets are self-correcting and efficient. However, when externalities or market power distort prices and allocation of resources, market failure occurs. One remedy for market failure is the provision of public goods and services by the government, as they are typically underproduced or not supplied by markets. Therefore, statement II is true, while statement I is false.

Statement I.Market failure rarely happens under capitalism.
Statement II.One remedy for market failure is public goods and services.

A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false.

Definitions

Learning Objectives

Learning Objectives

Related questions

Statement I.Market failure rarely happens under capitalism.Statement II.One remedy for market failure is public goods and services.A) Statement I is true and statement II is false.B) Statement II is true and statement I is false.C) Both statements are true.D) Both statements are false.

Definitions

Learning Objectives

Learning Objectives

Related questions

Statement I.Market failure rarely happens under capitalism.
Statement II.One remedy for market failure is public goods and services.

A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false.