An economist would be most likely to argue that U.S.national defense should be funded through tax revenues because:
A) U.S. citizens are not very patriotic.
B) the government is always a more efficient provider of goods than the private market.
C) the government always seeks to act benevolently on behalf of its citizens.
D) individuals who refuse to contribute to a national defense fund cannot be excluded from benefiting from national defense.

Question

Quizplus · Accepted Answer

The economist would argue that national defense should be funded through tax revenues because individuals who refuse to contribute to a national defense fund cannot be excluded from benefiting from national defense. This is known as the free rider problem, where individuals can enjoy the benefits of a public good (such as national defense) without contributing to its provision. By funding national defense through tax revenues, everyone is required to contribute, ensuring that the costs are distributed fairly and efficiently.

An Economist Would Be Most Likely to Argue That U