Estimates suggest that tens of thousands of people have died because the FDA withheld beta-blockers from the market while testing to determine whether the drugs were safe and effective. This is an example of:

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The prompt describes a situation where tens of thousands died because the FDA withheld beta-blockers from the market while testing for safety and efficacy, and asks which concept this illustrates.
Option 1: bureaucratic incompetence. This would attribute the outcome to failures in organizational performance, management, or procedural inefficiencies within the FDA or related agencies. While organizational issues could contribute, the scenario emphasizes a deliberate withholding during testing rather than a general failure to manage procedures, so this label may not precisely capture the underlying economic/administrative concept at play.
Option 2: market failure. Market failure occurs when free markets fail to allocate resources efficiently on a broad scale due to externalities, information gaps, or public goods aspects. The description here points to a lag between development and access to a drug, driven by regulatory decisions affecting when a drug enters the market, rather than a general misallocation of resources across a market in response to prices and incentives. So this option describes a related phenomenon but does not directly name the regulatory delay as the mechanism.
Option 3: drug lag. This term is specifically used to describe delays in getting beneficial medications from development to market authorization and patient access due to regulatory testing requirements, safety reviews, or administrative procedures. The example fits the notion of a lag in bringing a drug to the market, which can have grave consequences, including preventable deaths, making this label a precise match.
Option 4: drug loss. This phrasing is not a standard economic or regulatory term for the described phenomenon. It is vague and does not capture the formal concept of delays or hindrances in drug availability caused by policy or regulatory processes. It misframes the effect by focusing on a generic notion of loss rather than a defined mechanism like a lag.
In summary, the scenario aligns best with the idea of a regulatory or approval delay in bringing a drug to market, i.e., a drug lag, rather than a generic incompetence label, a broad market failure, or an undefined term like drug loss. The nuanced distinction lies in identifying the mechanism as a delay in access due to testing and regulatory decisions rather than a broader systemic market inefficiency or organizational fault.

ECON 201 Quiz 1: Chs 1 and 2 on Key Ideas & the PPF

Estimates suggest that tens of thousands of people have died because the FDA withheld beta-blockers from the market while testing to determine whether the drugs were safe and effective. This is an example of:

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