In the Case of a Good That Has No Exclusion

question 73

Multiple Choice

In the case of a good that has no exclusion and no rivalry,private markets fail because

• A) of free-ridership.
• B) this is a natural monopoly.
• C) profit is driven down to zero.
• D) the quantity produced will exceed the social optimum.

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Definitions:

Sales Contract

A legal agreement between a buyer and seller outlining the terms of a sale of goods or services.

Insure

To provide or obtain insurance coverage against risk or loss.

Rights

Entitlements or freedoms granted to individuals or groups by law, social convention, or moral principles.

Liabilities

Financial obligations or debts that a company or individual owes to others.