To achieve optimal provision of public goods, the, a. market should be allowed to arrive at...

To achieve optimal provision of public goods, the,
a. market should be allowed to arrive at an equilibrium without government intervention.
b. Government must limit the provision of the goods. c. government must tax producers of the goods. d. government must either provide the goods or subsidize their production.

Expert Solution

correct answer is

D. government must either provide the goods or subsidize their production.

For public goods to reach/benefit maximum people, show provide it or subsidize its rate so that it can reach maximum people.

Public goods include roads, railways, sanitation, light houses, defence system. These are not provided with the objective to earn an income. They are to develop the quality of human life and the economy.

If the market is allowed to reach equilibrium with out intervention, a huge part of the population will not get the benefits of it since players in the market have the objective to make a profit and public goods are not with the objective of profit making.

If the government limits its provision, then people it will not be available to a large part of the population.

If the government taxes producers of the goods then the producers will leave the market.

Rahul Sunny answered 2 years ago

Define Public goods. Why is it that the provision of public goods is problematic under collective...

Define Public goods. Why is it that the provision of public goods is problematic under collective action? (not less than 1000 words)

8. When some goods are public A. The market outcome is Pareto optimal B. The market...

8. When some goods are public A. The market outcome is Pareto optimal B. The market outcome is not Pareto optimal because too much of the public good is supplied. C. The market is not Pareto optimal because too little of the public good is supplied due to the free-rider problem. D. The market outcome is not Pareto optimal because government spending is distortionary.

"Why is the private market unlikely to provide the optimal level of public goods due to...

"Why is the private market unlikely to provide the optimal level of public goods due to the free rider problem?"

Should workers in the public sector be allowed to organize (forming unions)? Should they be allowed...

Should workers in the public sector be allowed to organize (forming unions)? Should they be allowed to go on strike? Qualify your answers if necessary.

Explain briefly why the private market for public goods is typically characterized by under-provision. Under what...

Explain briefly why the private market for public goods is typically characterized by under-provision. Under what situations will we expect the private market to overcome this problem (at least partially)?

Write down the Samuelson’s condition for the optimal provision of a public good. Use an example...

Write down the Samuelson’s condition for the optimal provision of a public good. Use an example to explain your understanding of it.

(3). Write down the Samuelson’s condition for the optimal provision of a public good. Use an...

(3). Write down the Samuelson’s condition for the optimal provision of a public good. Use an example to explain your understanding of it.

Explain the neutrality of income redistribution in the private provision of pure public goods

Discuss the properties of Public Goods and the Free-Rider Problem that can arise in the provision...

Discuss the properties of Public Goods and the Free-Rider Problem that can arise in the provision of those public goods and service.

Explain the neutrality of income redistribution in the private provision of pure public goods? How is...

Explain the neutrality of income redistribution in the private provision of pure public goods? How is it related to perfect crowding out of government provision? Consider now the private provision of a local public good in a star network with three agents. Find the direction of welfare improving transfer? Find the direction for increasing the aggregate provision? Compare the two results.

Question