Due to the externalities associated with public goods and common resources,
A)private markets will lead to an efficient allocation of resources.
B)government intervention can potentially raise economic well-being.
C)private markets will correct for the gain or loss to consumer surplus.
D)the free-rider problem is eliminated.

Question

Quizplus · Accepted Answer

Private markets may not lead to an efficient allocation of resources for public goods and common resources because individuals may not voluntarily pay for their use, leading to underproduction or depletion. Therefore, government intervention, such as taxes or quotas, can potentially raise economic well-being by addressing the negative externalities and encouraging optimal allocation.

Due to the Externalities Associated with Public Goods and Common