Fill in the blanks to make the following statements correct.
a. The "formal defence" of free markets is that, if all markets were perfectly competitive, then prices would equal ________ for all products and the economy would be ________.
b. The "informal defence" of free markets is based on the following three central arguments:
• ________
• ________
• ________
c. A situation in which the free market, in the absence of government intervention, fails to achieve allocative efficiency is called ________.
d. There are four major market failures that, in principle, justify government intervention in markets. They are as follows:
• ________
• ________
• ________
• ________