One source of friction in the governmental provision of a pure public good is that voters receive __________ of the public good and have __________ for the public good.

Question

Quizplus · Accepted Answer

Since public goods are non-excludable, all voters receive the same amount of the public good. However, they may have different reservation prices, meaning the maximum amount they are willing to pay for the public good. This creates friction because those with lower reservation prices may not be willing to pay for the public good at the same level as those with higher reservation prices, leading to under-provision or over-provision of the public good. Choice C reflects this dynamic.

One Source of Friction in the Governmental Provision of a Pure