When Something of Value Has No Price Attached to It

question 376

Multiple Choice

When something of value has no price attached to it,

• A)externalities will be present.
• B)production of the product has no cost.
• C)government should not intervene to produce the product.
• D)private companies will eventually produce the product, and the good will no longer be free.

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Definitions:

Market Forces

The natural forces of supply and demand that govern the functioning of the free market, determining prices and production levels.

Rival

Describes a good or resource that cannot be consumed by more than one person or entity at the same time without diminishing its availability to another.

Nonexclusive

A property of a good or service where one person's use does not diminish availability to others.

External Benefit

A benefit that results from an economic activity which accrues to unrelated third parties.