Which of the Following Is True of Public Goods

question 66

Multiple Choice

Which of the following is true of public goods?

• A) They can only be supplied by the government.
• B) They will tend to be supplied efficiently by the private sector when markets are competitive.
• C) It is difficult to establish a one-to-one link between payment and receipt of such goods.
• D) From an efficiency standpoint, private markets will tend to supply an excessively large amount of public goods.

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Definitions:

Book Value

The net asset value of a company, calculated as total assets minus intangible assets (patents, goodwill) and liabilities.

Income Taxes

Taxes on an individual's or corporation's income imposed by the government.

Modified Accelerated Cost Recovery System (MACRS)

The system of accelerated depreciation allowed for federal tax computations.

5-Year Asset

An asset that is expected to provide economic value or service for a period of five years.