Markets May Have Difficulty Providing the Proper Quantity of a Public

question 14

Multiple Choice

Markets may have difficulty providing the proper quantity of a public good because

• A) individuals will tend to become free riders, and private firms will have difficulty generating enough revenue to produce an efficient quantity of the good.
• B) the good generally has a very large value to consumers relative to its cost of production.
• C) the good is one that tends to benefit a large number of people.
• D) the large profit involved in the production of a public good is generally too much for private firms to effectively pay out to shareholders.

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Definitions:

Long-term Debt

Financial obligations owed by a company that are due more than one year in the future, typically including bonds, long-term loans, and lease liabilities.

Internal Control

The processes designed to ensure the reliability of financial reporting, effectiveness and efficiency of operations, and compliance with laws and regulations.

Payroll Checks

Payments made to employees for the work they have done, often processed through a company's payroll system.

Current Liabilities

Current liabilities are obligations a company needs to pay off within a year, such as accounts payable, short-term loans, and accrued expenses.