What can we do to deal with 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)Government intervention can completely eliminate the free-rider problem.

Question

Quizplus · Accepted Answer

Public goods and common resources have externalities and market failures, which require government intervention to ensure an efficient allocation of resources. The government can impose taxes or subsidies on these goods to internalize the externalities, promote efficient use, and increase economic well-being. Private markets alone cannot effectively handle public goods and common resources because they tend to underproduce these goods and overuse common resources.

What Can We Do to Deal with the Externalities Associated