Economics · Market Failure Theory
Which of the following statements regarding Francis Bator's contribution to microeconomic theory and the systematic taxonomy of market inefficiencies is INCORRECT?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Bator's taxonomy of inefficiencies provides a theoretical framework to understand why decentralized market decisions may require remedial policy measures to reach social efficiency.
- 2The concept of market failure as systematized by Bator involves the inability of free markets to allocate resources efficiently, resulting in socially suboptimal outcomes.
- 3Francis Bator developed a systematic taxonomy of market failure in his seminal 1958 work titled 'The Anatomy of Market Failure'.
- 4Francis Bator is the economist credited with the 1958 introduction of 'Signalling' theory, which posits that high-ability workers use education to convey quality in the labour market.✓
Correct answer
Francis Bator is the economist credited with the 1958 introduction of 'Signalling' theory, which posits that high-ability workers use education to convey quality in the labour market.
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