The production of economically desirable public goods must be sponsored by government because: the law of...

The production of economically desirable public goods must be sponsored by government because:

		the law of increasing marginal opportunity costs does not apply to public goods.
		the existence of large external costs precludes their production in the private sector.
		the benefits derived from their production exceed the costs of producing them.
		public goods have characteristics which make it difficult or impossible for private firms to produce them profitably.

Solutions

Expert Solution

Ans) the correct option is d) public goods have characteristics which make it difficult or impossible for private firms to produce them profitably.

It is difficult for private firms to produce public goods profitablly so public goods must be sponsored by government.

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

The reason why government must provide public goods is due to what?

1) Law of Diminishing returns and Law of Marginal utilities public goods and private goods and...

1) Law of Diminishing returns and Law of Marginal utilities public goods and private goods and how they are paid for and rationed? 2) Perfect Competition (a) # of firms (b) Barriers to entry (c) Is the product homogeneous or heterogeneous (d) Ads (e) Firm is price taker (f) Draw a diagram

should the government provide public goods

How does the government establish the best price to charge for public goods? (Public goods are...

How does the government establish the best price to charge for public goods? (Public goods are goods that are supplied by the government)

Why must firms try to employ the most economically efficient production techniques?

Because they are nonrivalrous and nonexcludable, public goods provide a lot of marginal benefit to a...

Because they are nonrivalrous and nonexcludable, public goods provide a lot of marginal benefit to a lot of people when they are produced. However, some people really benefit a lot from them. For example, people who drive a lot benefit the most from freeways. Why can’t we just sit back and let those people voluntarily buy the public goods we need? There are two main reasons. In what ways would this lead to an inefficient outcome?

How could government intervention be justified in the market failure of public goods, ie. public health?

) Explain why environmental services, because they are public goods, are undervalued or priced too low....

) Explain why environmental services, because they are public goods, are undervalued or priced too low. (B) Explain briefly, but by using as many examples from the three books of readings as possible, how groups of people (government) or private individuals were able to increase the amount of environmental quality, by connecting or attaching an environmental service to a private good, showing how revenue from the private good increased the production of the public good. In the various examples, explain...

Government intervention to provide public goods is widely rationalized by the failure of the market mechanism...

Government intervention to provide public goods is widely rationalized by the failure of the market mechanism to efficiently allocate resources. Discuss the above statement in the light of the different classes of market failure that arise in actual economies.

Must be at least 250 words In the “Public Health Law” Grand Rounds that you viewed...

Must be at least 250 words In the “Public Health Law” Grand Rounds that you viewed and discussed on Blackboard, Montrece McNeill Ransom, JD, MPH, concluded her presentation by saying “there really is no public health without the law.” Support or refute this assertion using at least two specific examples to support your position.

Subjects