Why Will a Private Market Be Unable to Produce the Efficient

question 136

Multiple Choice

Why will a private market be unable to produce the efficient quantity of public goods?

• A) Because the good is nonexcludable, so there is the free- rider problem.
• B) Because the good's marginal cost is too low.
• C) Because the good is rival, so no one will want to pay the producer for it.
• D) All of the above answers are correct.

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Definitions:

Ambient Storage

A method of storage that does not require any artificial temperature control, relying instead on the ambient conditions of the surroundings.

Recursive Automatization

The process through which a task or skill becomes automatic through repetition, reducing the cognitive load required for its execution.

Computer Analogy

The computer analogy in psychology refers to comparing the human mind and its processing of information to the way a computer operates, including input, processing, and output functions.

Automatization

The process of making an action or procedure automatic through repetition or practice.