In the Case of a Good That Has No Exclusion

question 73

Multiple Choice

In the case of a good that has no exclusion and no rivalry,private markets fail because

• A) of free-ridership.
• B) this is a natural monopoly.
• C) profit is driven down to zero.
• D) the quantity produced will exceed the social optimum.

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Definitions:

Agents

Individuals or entities authorized to act on behalf of another (the principal) in dealings with third parties.

Respondeat Superior

A legal doctrine holding employers or principals liable for the wrongful acts of their employees or agents, committed within the scope of their employment or authority.

Tort Liability

Legal responsibility arising from a civil wrong that causes harm or loss to another party, not based on contractual obligations.

Unauthorized Acts

Actions taken by an individual or entity that have not been approved or sanctioned by the necessary authority or party.