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.

Economics

You might also like to view...

Which of the following is likely to cause a market failure and be over consumed?

A. Cable TV B. Grazing pastureland C. Public health D. Education

Economics

Explain the concept of sunk costs with an example

Economics

Automatic stabilizers:

What will be an ideal response?

Economics

If the number of buyers in a market decreases, then

a. demand will increase. b. demand will decrease. c. supply will increase. d. supply will decrease.

Economics