The Concept of Rational Ignorance Can Explain Why the Government

question 32

True/False

The concept of rational ignorance can explain why the government might provide more than the efficient quantity of a public good.

---

Definitions:

Externalities

Financial repercussions impacting bystanders who are not directly involved, which can be beneficial or detrimental.

Efficient Level

Efficient Level refers to the optimal amount of production or activity that maximizes benefits or utility while minimizing costs or waste.

Impose a Tax

The act of a governing body levying a financial charge or other levy upon a taxpayer, which can affect individuals, entities, or transactions.

Efficient Amount

The optimal level of production or consumption where resources are utilized in the most effective manner without waste.