Comment on the following statement: "If the provision of public goods was left to private firms, the outcome would be more efficient than what occurs when the government provides them."
What will be an ideal response?
The statement is false. If the provision of public goods was left to private firms, the public goods would generally not be produced. If these goods have any value to households, this outcome would not be efficient at all. On the other hand, if the government is able to tax households and then provide the goods, a more efficient situation may result.
You might also like to view...
Financial capital is highly volatile, and technological advances have reinforced this volatility
Indicate whether the statement is true or false
Government failure
A. leads to a more efficient allocation of resources. B. occurs because government officials do not act in their own self?interest. C. occurs because households or firms do not act in their own self?interest. D. leads to a less efficient allocation of resources.
A possible reason a nation might impose a protectionist policy such as a tariff is to
A) encourage specialization in the good in which the nation has a comparative advantage. B) protect an infant industry from foreign competitors. C) increase the level of imports. D) slow domestic production.
Which of the following is an example of a hidden characteristic?
A) After purchasing life insurance, Billy joins the bomb squad. B) Only the owner knows about her car defects. C) Bobby let his employer know about his college degree. D) Sally provides her driving record to the car insurance company.