The Market System Fails to Provide the Efficient Output of Public

question 64

Multiple Choice

The market system fails to provide the efficient output of public goods because:

• A)people do not value public goods.
• B)private firms cannot restrict the benefits from those goods to consumers who pay for them.
• C)public enterprises can produce those goods at a lower cost than private firms.
• D)public goods create widespread spillover costs.
• E)public goods generate positive externalities and markets tend to underproduce such goods.

---

Definitions:

Test Statistic

A value, derived from sample data, used in hypothesis testing to determine whether to reject the null hypothesis.

Rejection Region

The range of values for which the null hypothesis is rejected in hypothesis testing.

Wilcoxon Signed-Rank Test

A non-parametric statistical test used to compare two related samples to determine if their population mean ranks differ.

Nonparametric Method

Statistical methods that are not based on parametric assumptions about the distribution of the population.