A fundamental reason that governments provide public goods is that
A) those goods are subject to the free-rider problem.
B) negative externalities are part of the production process of those goods.
C) public goods are merit goods.
D) those goods are perfectly divisible.
A
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Which is larger: The price elasticity of demand for food or the price elasticity of demand for oranges? Why?
What will be an ideal response?
If the Habakkuk thesis had been correct—unamended by Rosenberg, David and others—a long-run decline in the supply of agricultural productivity west of the Appalachians would be matched by a proportional
(a) decline in the productivity growth in eastern manufacturing. (b) increase in productivity in eastern manufacturing. (c) rise in American food imports. (d) rise in American exports of manufacturing.