Why is national defence provided by the government?
a) Free riders make it difficult for private markets to supply the socially optimal quantity.
b) It is impossible for private markets to produce public goods.
c) If the good were produced in private markets, most likely too much of the good would be produced.
d) Products provided by the government can be produced more efficiently.
Answer : a) Free riders make it difficult for private markets to supply the socially optimal quantity.
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Automatic stabilizers:
What will be an ideal response?
If the number of buyers in a market decreases, then
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