Why is it safe to assume that national defense will always be provided by the government instead of the market?
What will be an ideal response?
National defense is a public good, which means that consumption by one person does not exclude consumption by other people. This joint consumption creates a dilemma referred to as the free-rider problem. Once national defense is purchased, even those who do not pay for the defense will benefit from it, so no one person is willing to pay for the defense. The government must get involved and provide national defense and other public goods.
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In analyzing the gains and losses from international trade, to say that Moldova is a small country is to say that
a. Moldova can only import goods; it cannot export goods. b. Moldova's choice of which goods to export and which goods to import is not based on the principle of comparative advantage. c. only the domestic price of a good is relevant for Moldova; the world price of a good is irrelevant. d. Moldova is a price taker.
Explain what is meant by a competitive market
Please provide the best answer for the statement.