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:

Theory of Mind

The ability to attribute mental states—beliefs, intents, desires, emotions, knowledge—to oneself and to others, and to understand that others have beliefs, desires, and intentions that are different from one's own.

Worldview

A comprehensive perspective or collection of beliefs through which an individual interprets and understands the world around them.

Self-Esteem

An individual's overall subjective emotional evaluation of their own worth.

Dominant

Referring to a trait that overshadows or is more likely to be expressed in the presence of another.