Economics 0455 · IGCSE · Market failure

Market failure — practice question

A government permitted a building company to construct new houses, and this damaged an area that had been designated as one of natural beauty. Which concepts can be applied to this statement?

  • Abudget surplus; public sector
  • Bexternal cost; opportunity cost
  • Cgovernment subsidy; mixed economy
  • Dprivate enterprise; budget deficit

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