Perfectly competitive markets will tend to under-allocate resources to nonexclusive public goods because
a. these goods are produced under conditions of increasing returns to scale
b. no single individual can appropriate the total benefits provided by the purchase of such goods.
c. these goods are best produced under conditions of monopoly.
d. no private producer can provide the capital necessary to produce such goods.
b
You might also like to view...
Unregulated markets will tend to
A. rapidly deplete any natural resource. B. naturally conserve any depletable natural resource by pushing up its price every year by a constant dollar amount. C. naturally conserve a depletable resource by pushing up its price at a constant rate every year. D. deplete a resource unless new supplies are found.
Trading off capital goods for increasing amounts of consumer goods today will most likely result in
A) increased long-term growth. B) decreased long-term growth. C) decreased prices in consumer goods. D) increases in the quantity of consumer goods.
The expenditure approach to GDP accounting includes:
a. wages and salaries. b. net exports. c. net interest. d. corporate profit. e. proprietors' income.
Which of the following statements is true regarding perfect competition?
a. A perfectly competitive market only exists in the agricultural market. b. A perfectly competitive market is a hypothetical extreme. c. There are many examples of perfectly competitive markets in different industries. d. Perfectly competitive markets are the opposite of price takers.