The costs of lead contamination have been estimated to be $1 billion for medical care of those sickened by lead, plumbing repairs, and reduced earnings of those affected by lead. This $1 billion can best be classified as:

a. the benefits of government intervention

b. the costs of government intervention

c. social costs of market failure

d. social costs of government failure

Question

Social Studies

Cisco

24 May, 10:30

The costs of lead contamination have been estimated to be $1 billion for medical care of those sickened by lead, plumbing repairs, and reduced earnings of those affected by lead. This $1 billion can best be classified as:

a. the benefits of government intervention

b. the costs of government intervention

c. social costs of market failure

d. social costs of government failure

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Answers (1)

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Brenton · Answer 1

d. social costs of government failure

Explanation:

Social costs are those costs associated with production of a goods or services which are not accounted for by the free market. These costs are not compensated by the market. Pollution produced by the car in the atmosphere is a social costs which is not accounted for in the cost of manufacturing car. cost of displacing human population for building a dam is a social cost of building dam. They are not compensated by the market.

In the given case, all the costs given are associated with government failure which leads to lead contamination. These costs are not accounted for in the production cost of the goods. So they are social cost.