Economics 9708 · AS & A Level · Government intervention in markets

Government intervention in markets — practice question

A government wants to step in within a free market so that healthcare is allocated at the socially optimal level. Which combination accurately identifies the reason for government intervention in the healthcare market?

  • Ahealthcare consumption in a free market: overconsumption; healthcare production in a free market: overproduction; provision of information in a free market: too little
  • Bhealthcare consumption in a free market: overconsumption; healthcare production in a free market: underproduction; provision of information in a free market: too much
  • Chealthcare consumption in a free market: underconsumption; healthcare production in a free market: underproduction; provision of information in a free market: too little
  • Dhealthcare consumption in a free market: underconsumption; healthcare production in a free market: overproduction; provision of information in a free market: too much

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