Which of the following is a disadvantage of government provision of a public good such as...
Which of the following is a disadvantage of government provision
of a public good such as national defense?
(i)The government does not know the exact willingness of consumers
to pay for the public good.
(ii)The free-rider problem is more likely to occur when the
government provides a public good than when the private sector
provides a public good.
(iii)Taxpayers do not agree on the optimal quantity of the public
good that the government should provide.
Homework Answers
Answer - Option B
The free rider problem is more likely to occur when the government provides a public good than when the private sector provides a public good.
This is because a free rider does not want to pay for the consumption of the public goods. He feels that the goods are made for him only and he has the right to exploit them in his own way.
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