Which of the Following Is a Disadvantage of Government Provision

question 429

Multiple Choice

Which of the following is a disadvantage of government provision of a public good such as national defense? (i)
The government does not know the exact willingness of consumers to pay for the public good.(ii)
The free-rider problem is more likely to occur when the government provides a public good than when the private sector provides a public good.(iii)
Taxpayers do not agree on the optimal quantity of the public good that the government should provide.

• A)(i) only
• B)(i) and (ii) only
• C)(i) and (iii) only
• D)(i), (ii), and (iii)

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Definitions:

Federal Income Tax

The tax levied by the US government on the annual earnings of individuals, corporations, trusts, and other legal entities.

Middle Class

A social group between the upper and working classes, including professional and business workers and their families, characterized by moderate to high income levels and higher education.

Proportion

This refers to a part, share, or number considered in comparative relation to a whole.

Ronald Reagan

The 40th President of the United States, known for his economic policies known as Reaganomics, which focused on tax cuts, deregulation, and increased defense spending.