Which of the Following Is True of Public Goods

question 66

Multiple Choice

Which of the following is true of public goods?

• A) They can only be supplied by the government.
• B) They will tend to be supplied efficiently by the private sector when markets are competitive.
• C) It is difficult to establish a one-to-one link between payment and receipt of such goods.
• D) From an efficiency standpoint, private markets will tend to supply an excessively large amount of public goods.

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Definitions:

Marginal Cost

The cost of producing one additional unit of a product or service, a crucial concept in economic analysis and decision-making.

Fixed Cost

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Patent

A legal right granted to an inventor or assignee to exclusively make, use, or sell an invention for a certain number of years.

Fixed Cost

Expenses that do not change in total despite fluctuations in the volume of goods or services produced or sold.