Economics 2281 · O Level · Market failure

Market failure — practice question

A government permitted a building company to construct new houses, which led to the destruction of an area that had been designated as an area of natural beauty. Which concepts could 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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