If Good X Is Available Free of Charge, Then

question 392

Multiple Choice

If good x is available free of charge, then

• A)good x must be provided by nature.
• B)good x must be provided by the government.
• C)the private market cannot ensure an efficient allocation of resources in the market for good x.
• D)government policy is incapable of increasing total surplus in the market for good x.

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Definitions:

Well-reasoned Decisions

Choices or conclusions derived from careful thought, analysis, and evaluation of relevant information.

Rational Expectations

The hypothesis that people form forecasts about the future based on all available information in an unbiased manner and learn from past mistakes.

Private Sector

The part of the economy that is owned and operated by individuals and private companies, not controlled by the government.

P

In economic terms, often stands for Price, which reflects the monetary cost of acquiring a good or service in the market.