Governments Usually Build Highways Because It Is Difficult to Exclude

question 117

Multiple Choice

Governments usually build highways because it is difficult to exclude individuals who don't pay for the highways from using them.What type of market failure is involved?

• A)Inequity.
• B)Public goods.
• C)Externalities.
• D)Market power.

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Definitions:

Bilateral

Pertains to agreements or contracts involving two parties where each side is obligated to fulfill certain duties.

Unilateral

An action or agreement in which only one party makes a promise or fulfills a requirement, without requiring a reciprocal action.

Express Agreement

A contract or agreement in which the terms are explicitly stated and agreed upon by all parties involved.

Illegal

Activities or actions that are prohibited by law and subject to penalties.