A Commonality Between Externalities and Public Goods Is That

question 8

Multiple Choice

A commonality between externalities and public goods is that:

• A)in each case, markets are not likely to allocate resources efficiently, even though they might otherwise be competitive.
• B)in each case, government agency intervention would create inefficiency compared to the market solution.
• C)competitive markets are likely to be efficient in each case.
• D)the invisible hand (as discussed by Adam Smith)is likely to lead to efficiency in each case.