In the Case of a Public Good

question 75

Multiple Choice

In the case of a public good:

• A) a consumer could be a free rider.
• B) firms get a signal that fully reflects benefits received by consumers.
• C) firms will get signals to produce more than is economically efficient.
• D) it is quite costly to add consumers.

---

Definitions:

Direct Costs

Expenses that can be directly attributed to the production of specific goods or services, such as raw materials and direct labor.

Liability Insurance

An insurance policy that provides protection against claims resulting from injuries and damage to people and/or property.

Merchandising Firm

A business that purchases finished goods for resale, making profit through the markup of those goods.

Period Costs

Costs that are taken directly to the income statement as expenses in the period in which they are incurred or accrued.