Question

Markets always allocate resources in ways that meet ideal economic efficiency.

True. Market encourages people to create value
True. The invisible hand guarantees good market results
False. The invisible hand never works
False. Markets can sometimes fail to reach efficiencies when there are externalities, public goods, monopoly, or serious information asymmetries

Answer 1

False. Markets can sometimes fail to reach efficiencies when there are externalities, public goods, monopoly, or serious information asymmetries

Step-by-step explanation:

Invisible hand (effective allocation of resources in a laissez faire economy) sometimes works because when market function effectively and send correct price as signal of values (to society) to producers.

However, when goods can't be traded on markets (public goods) or its values are not correctly reflected on markets (externalities, information asymmetries) or competition is not ensured (monopoly), markets cannot ensure effective allocation of resources.