Question

The basic principles of economics suggest that

a. markets are seldom, if ever, a good way to organize economic activity.

b. government should become involved in markets when trade between countries is involved.

c. government should become involved in markets when those markets fail to produce efficient or fair outcomes.

d. all of the above are correct.

Answer 1

The answer is: C. government should become involved in markets when those markets fail to produce efficient or fair outcomes.

When left without regulations, many companies decided to do unfair business practice such as putting materials that dangerous for the consumers or giving their employees with unfair wages.

Because of this, government need to step in and make regulations to watch over the companies. (such as determining which materials would be safe as ingredients or creating legislation that regulate the minimum wages in the state)