When the government bans a good:
A)it is an easy,but often ineffective,solution to the nonexcludability problem.
B)it creates a more efficient solution than any other to the nonexcludability problem.
C)it increases surplus more than any other solution to the nonexcludability problem.
D)it is the easiest and most effective solution to the nonexcludability problem.

Question

Quizplus · Accepted Answer

Banning a good is often viewed as an easy solution to the nonexcludability problem, but it may not necessarily be the most effective solution. Nonexcludability refers to the difficulty of excluding non-payers from using a good or service. When a good is nonexcludable, individuals may free-ride and end up consuming more than their fair share of the good, which can lead to market failures. Banning the good may prevent this overconsumption, but it may also create other problems and inefficiencies, such as black markets, smuggling, and increased enforcement costs. Therefore, while banning a good may be an easy solution, it may not be the most effective or efficient one.

When the Government Bans a Good