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Figure: Traffic Lights in Plymouth
-(Figure: Traffic Lights in Plymouth)Use Figure: Traffic Lights in Plymouth.Plymouth has 1,000 residents.Each of the residents has the same individual marginal benefit per traffic light.Without government intervention,the town will have _____ traffic lights.
A)0
B)4
C)8
D)12

Question

Use the following to answer questions:
Figure: Traffic Lights in Plymouth 
-(Figure: Traffic Lights in Plymouth)Use Figure: Traffic Lights in Plymouth.Plymouth has 1,000 residents.Each of the residents has the same individual marginal benefit per traffic light.Without government intervention,the town will have _____ traffic lights.
A)0 
B)4 
C)8 
D)12

Quizplus · Accepted Answer

Without government intervention, the provision of public goods like traffic lights, which are non-excludable and non-rivalrous, is often underprovided due to the free-rider problem. This means individuals have no incentive to pay for the good, expecting others to cover the cost, leading to a situation where no traffic lights would be provided.

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