The following text is from an economics article.
Market failures provide classical justifications for government intervention. Externalities, public goods, and information asymmetries represent situations where unregulated markets produce suboptimal outcomes. However, "government failures"—bureaucratic inefficiency, regulatory capture, unintended consequences—suggest that intervention may also produce suboptimal results. The relevant question is not whether markets or governments fail, but which institutional arrangement minimizes failure in specific contexts.
Which choice best describes the function of the last sentence?
It introduces a new topic about international trade.
It argues that government intervention is always preferable to markets.
It reframes the debate by proposing a more nuanced evaluation criterion.
It provides statistical evidence about intervention outcomes.
Correct Answer: C
Choice C is the best answer. The last sentence reframes from "markets vs. government" to which arrangement minimizes failure contextually—a more nuanced criterion.
- Evidence: The sentence states: "The relevant question is not whether markets or governments fail, but which institutional arrangement minimizes failure in specific contexts."
- Reasoning: It rejects the binary choice (Market vs. State) in favor of a context-dependent optimization.
- Conclusion: The function is to reframe the debate.
💡 Strategy: Look for "The relevant question is not... but..." -> Reframing.
Choice A is incorrect because trade isn't introduced. Choice B is incorrect because context-dependency is emphasized. Choice D is incorrect because no statistics are provided.