Why Does the Government Provide Public Goods

question 114

Multiple Choice

Why does the government provide public goods

• A)Private markets are incapable of producing public goods.
• B)Free riders make it difficult for private markets to supply the socially optimal quantity.
• C)Markets are always better off with some government oversight.
• D)External benefits will occur to private producers.

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Definitions:

Document of Title

A legal document evidencing the right to control the disposition of goods, such as a bill of lading or warehouse receipt.

Storage of Goods

The act of keeping goods in a space designated for their preservation or until they are sold or distributed.

Warranties

Promises or guarantees made by a seller regarding the quality, condition, or performance of a product.

Insurance Contracts

Legal agreements between an insurance company and a policyholder that define the claims which the insurer is legally required to pay.