Private Producers Have No Incentive to Provide Public Goods Because

question 175

Multiple Choice

Private producers have no incentive to provide public goods because

• A)the government subsidy granted is usually insufficient to enable private producers to make a profit.
• B)production of huge quantities of public goods entails huge fixed costs.
• C)they cannot avoid the tragedy of the commons.
• D)once produced, it will not be possible to exclude those who do not pay for the good.

Understand the criteria used by financing institutions in lending decisions.

Recognize the significance of debt-to-equity ratios for new and young businesses.

Differentiate between various types of financial obligations on a balance sheet.

Comprehend methods of financing for purchased equipment.

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