Question

The principle role of government when there is a market failure is To increase economic rent to those with self regarding preferences To reduce the role of private industry To attempt to allocate resources efficiently To sue those involved

Answer 1

1) The principle role of government is market failure is :
To attempt to allocate resources efficiently

Market failure is the economic situation defined by an inefficient distribution of goods and services in the free market. The principle role of government in case of this situation is to To ensure that resources are allocated efficiently.

2) Government remedies for market failures include all of the following, but :
Changing consumer preferences

3) Public choice theory is a branch of economics that studies:
How people use government institutions in pursuing self centered goals.

This theory basically employs the tools of economics to explain real-world political behaviour.

4) This difference in pay might be called :
Economic rent

Economic rent is an amount of money earned that exceeds that which is economically or socially necessary.