Why don't competitive markets do a good job providing public goods?
a. Because public goods generate negative externalities, and pollution taxes reduce the incentive for firms to supply public goods.
b. Because it is difficult to exclude people from gaining benefits from public goods without paying for them, and so market demand does not reflect the benefits to society from the public good.
c. Because firms cannot produce enough to satisfy market demand.
d. Because people do not receive benefits from public goods.
b
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List some examples of the scarcity that you face
What will be an ideal response?
One drawback of fiscal policy is the time it takes to enact the legislation necessary to activate it
a. True b. False Indicate whether the statement is true or false
The Celler-Kefauver Act deals primarily with which of the following issues?
a. price discrimination b. exclusive dealing c. mergers d. deceptive advertising e. boards of directors
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the short run would be:
A. P1 and Y2. B. P3 and Y1. C. P2 and Y2. D. P2 and Y3.