An Important Difference Between the Demand for a Private Good

question 101

Multiple Choice

An important difference between the demand for a private good and the demand for a public good is that

• A)individuals reveal their preferences for a public good, but they do not have to reveal their preferences for a private good.
• B)the resources used to provide public goods are common resources or government owned; the resources used to produce private goods are all privately owned.
• C)individuals reveal their preferences for a private good, but they do not have to reveal their preferences for a public good.
• D)the demand for a private good produces consumption externalities; the demand for a public good produces production externalities.

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Definitions:

Debt Capital

Capital raised through borrowing, typically in the form of loans or bonds, that must be repaid with interest.

Marketable Securities

Low-risk securities with short maturities.

Accumulated Earnings

The total amount of net income a company retains over its existence, not distributed as dividends to shareholders but rather reinvested in the business.

CFO

Chief Financial Officer, an executive responsible for managing the financial actions of a company, including financial planning, risk management, and financial reporting.