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Figure: Traffic Lights in Tweed,Ontario
-(Figure: Traffic Lights in Tweed)Use Figure: Traffic Lights in Tweed.Tweed has 1 000 residents.Each of the residents has the same individual marginal benefit per traffic light.Without government intervention,the town will have _____ traffic lights.
A) 0
B) 4
C) 8
D) 12

Question

Use the following to answer questions :
Figure: Traffic Lights in Tweed,Ontario 
-(Figure: Traffic Lights in Tweed)Use Figure: Traffic Lights in Tweed.Tweed has 1 000 residents.Each of the residents has the same individual marginal benefit per traffic light.Without government intervention,the town will have _____ traffic lights.
A) 0 
B) 4 
C) 8 
D) 12

Quizplus · Accepted Answer

Without government intervention, public goods like traffic lights are typically underprovided because individuals do not have an incentive to pay for them, leading to a free-rider problem. Therefore, the town will have 0 traffic lights.

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