McqMate
| Q. |
Which of the following statements does not represent a market failure, i.e., a situation in which the pursuit of profit will not result in a net increase in consumer satisfaction? |
| A. | The costs of pollution, groundwater contamination and depletion, soil erosion and nuclear waste disposal are borne by parties external to the economic exchange between buyer and seller. |
| B. | Where there is no mechanism for pricing, for setting a value on, public goods, there is no guarantee that the markets result in the optimal satisfaction of the public interest in regard to public goods. |
| C. | Situations in which externalities have been internalized result in an equilibrium in the exchange price between true costs and benefits. |
| D. | The pursuit of individual self-interest results in a worse outcome than would have occurred had the behavior of the parties involved in the economic exchange been coordinated through cooperation or regulation rather than mere competition. |
| Answer» C. Situations in which externalities have been internalized result in an equilibrium in the exchange price between true costs and benefits. | |
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