Asked by
Milcah Guevarra
on Dec 11, 2024Verified
The government sometimes provides public goods because
A) private markets are incapable of producing public goods.
B) free-riders make it difficult for private markets to supply the efficient quantity.
C) markets are always better off with some government oversight.
D) external benefits will accrue to private producers.
Public Goods
Goods that are non-excludable and non-rivalrous, meaning they can be consumed by anyone and one person’s consumption doesn’t reduce availability to others.
Free-riders
Individuals who benefit from resources, goods, or services without paying for them, often seen in public goods and collective risk scenarios.
Private Markets
are markets where transactions are conducted directly between two parties without being publicly traded on an exchange.
- Become aware of the free-rider predicament and its effects on public good provisioning.
- Gain insight into the government's function in supplying public services and correcting market imperfections.
Verified Answer
MD
Learning Objectives
- Become aware of the free-rider predicament and its effects on public good provisioning.
- Gain insight into the government's function in supplying public services and correcting market imperfections.