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The Production of Economically Desirable Public Goods Must Be Sponsored

Question 53

Multiple Choice

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


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

Correct Answer:

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