One Difference Between the Demand for a Private Good and That

question 66

Multiple Choice

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

• A) with a private good, each consumer chooses the quantity she wants to consume but with a public good, each consumer chooses the price she is willing to pay for a fixed quantity.
• B) with a private good, each consumer chooses the quantity she wants to consume but with a public good, everyone consumes the same quantity.
• C) with a private good, each consumer receives different amounts of benefit from consuming the product but with a public good, every consumer realizes the same amount of benefit from consuming the product.
• D) the marginal benefit from consuming the last unit of a public good always exceeds the marginal benefit from consuming the last unit of a private good because there are externalities in the consumption of the former.

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Definitions:

Similarity To Other Situations

The degree to which a current scenario or issue replicates the aspects or conditions of a different situation previously encountered.

Confirmation Error

A cognitive bias involving the tendency to search for, interpret, favor, and recall information in a way that confirms one’s preexisting beliefs or hypotheses.

Decision Already Made

Decision already made refers to situations where a conclusion or resolution has been reached before discussing or presenting it to others, often making subsequent deliberations or inputs appear redundant.

Circular-Flow Diagram

A visual model that shows how goods, services, and money move through the economy in a circular manner between households and firms.