Which of the following explains why it is difficult to determine the optimal quantity of public goods that the government should produce?
A) It is difficult to determine how much budget the government should have each year.
B) It is difficult to assess exactly how much each individual values a public good.
C) It is difficult to identify how public goods really benefit the society.
D) It is difficult to find out how demographics change over time.

Question

Quizplus · Accepted Answer

It is difficult to assess exactly how much each individual values a public good, as preferences vary among individuals and there is no market price to determine demand. This leads to uncertainty in determining the optimal quantity of public goods that the government should produce.

Which of the Following Explains Why It Is Difficult to Determine