If We Think of Good Governance as a Public Good

question 42

Multiple Choice

If we think of good governance as a public good created by well-informed voters, we can predict that it will be:

• A)oversupplied.
• B)undersupplied.
• C)in market equilibrium, if left unchecked.
• D)in market equilibrium, despite market interference.

---

Definitions:

Budget Shortage

A situation where a government's expenditures exceed its revenues, leading to a deficit.

Information Asymmetry

A situation in which one party in a transaction has more or superior information compared to another, often leading to an imbalance in power or decision-making.

Money-Back Guarantee

A promise made by a seller to a buyer to refund the purchase price if the product does not meet certain specified criteria.

Signal

An action or conduct that conveys information about a person's intentions, capabilities, or qualities in situations of asymmetric information.