If government decides to produce a collective consumption good,taxes have to be levied to finance the production.In evaluating government provision then,the benefits of public production have to be _____.

Question

Quizplus · Accepted Answer

When government decides to produce a collective consumption good, it needs to finance it through taxation. Therefore, when evaluating government provision, the benefits of public production should be weighed against the excess burden of taxation, which represents the loss of economic welfare resulting from the distortionary effects of taxes on behavior and market outcomes. This is because excessive taxation can reduce overall economic welfare and have negative consequences on households, businesses, and the economy as a whole. So, the best choice is B - weighed against the excess burden of taxation.

If Government Decides to Produce a Collective Consumption Good,taxes Have