A public good will:
A. be efficiently provided by the free market as long as its total benefits exceed its total costs.
B. be efficiently provided by the free market as long as its marginal benefits exceed its marginal costs.
C. be provided in less than efficient quantities by the free market.
D. be provided in efficient quantities by voluntary contributions.
Answer: C
You might also like to view...
The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours. If Scott offers two swim tours per week, he incurs a marginal cost of
A) more than $30. B) $30. C) $20. D) $10. E) $2.
An increase in the real interest rate occurs when ________
A) monetary policy responds automatically to an increase in inflation B) expected inflation increases, relative to the nominal interest rate C) an increase in autonomous spending causes an increase in equilibrium output D) all of the above E) none of the above
If the price of an item can freely adjust, a market will
A. always have an excess quantity demanded. B. always move towards equilibrium. C. never move towards equilibrium because prices are always increasing. D. always have an excess quantity supplied.
We can derive the market demand curve for gold earrings
A) only if the tastes of all gold earring consumers are similar. B) by adding horizontally the individual demand curves of each gold earring consumer. C) by adding vertically the quantity demanded of each gold earring consumed at each price. D) by adding the prices each gold earring consumer is willing to pay for each quantity.