Why Is It Difficult for a Private Market to Provide

question 80

Multiple Choice

Why is it difficult for a private market to provide the economically efficient quantity of a public good?

• A)By law, governments cannot use cost-benefit analysis to determine this quantity.
• B)Public goods produce positive and negative externalities.
• C)Individual preferences are not revealed in the market for the good.
• D)It is too expensive to produce the necessary amount of the good.

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Definitions:

Motive

A psychological feature that arouses an organism to action toward a desired goal; the reason for the action.

Implicit Leadership Theories

Individual beliefs or assumptions about the traits and behaviors that make someone an effective leader, which can influence leadership assessments.

Monthly Loan Payment

The regular payment made to repay a loan, typically consisting of both principal and interest components, over a set period.

Bank

A financial institution licensed to receive deposits and make loans, and may offer various other financial services, such as wealth management, currency exchange, and safe deposit boxes.