When Dealing with Pure Public Goods

question 118

Multiple Choice

When dealing with pure public goods,

• A) government must always provide them.
• B) private firms will always provide them.
• C) government frequently provides them,although private firms provide some.
• D) government must legally compel private firms to provide them.
• E) private firms provide nearly all of them and government provides the few remaining ones.

---

Definitions:

Expected NPV

The anticipated net present value of an investment, considering various future scenarios and their probabilities.

Cost of Capital

The minimum expected return necessary to attract investors to provide capital for a project or investment.

Certainty Equivalent Approach

A method used to evaluate investment opportunities under conditions of uncertainty, adjusting future cash flows to present value as if they were certain.

Forecast Cash Flow

The estimation of the amount of money expected to be received and paid out over a future period.