Final answer:
Economists generally consider government actions wasteful whenever they over- or underallocate resources to a project. The efficiency of an economy and appropriate government intervention are critical to address market failures without being wasteful. Identification and implementation of accurate public policies are necessary to avoid wastefulness.
Step-by-step explanation:
Economists might consider governments to be wasteful in the context of resource allocation to projects. While there can be valid reasons for government intervention in the market, such as addressing monopolies or negative externalities, it is crucial for governments to accurately identify and implement proper public policies to mitigate market failures. The efficiency of an economy is tied to its use of resources and responsiveness to the needs of its people.
When the economy is not focused on efficiency, there can be a wasteful utilization of resources and a lack of responsiveness to people's demands. Government intervention is seen as potentially helpful, but it's also recognized that it has its imperfections and may not always represent the majority's views. Inappropriate government actions can lead to either overallocation or underallocation of resources, both of which can be deemed wasteful. Thus, economists generally consider government actions wasteful whenever they over- or underallocate resources to a project. Market failures typically arise when certain conditions such as competition, information, resource mobility, and accurate price signals are not met.