Without government intervention, society is likely to get too little production of:
A)private goods.
B)private goods that generate external costs.
C)private goods that generate external benefits.
D)public goods.
E)both private goods that generate external benefits and public goods.

Question

Quizplus · Accepted Answer

Without government intervention, individuals and companies may not have enough incentive to produce public goods or private goods that generate external benefits, as these goods do not generate profits directly for the producer. This can lead to underproduction of these types of goods, which can be important for the overall welfare of society. On the other hand, private goods that generate external costs may be overproduced, as the costs are not borne by the producer but rather by society as a whole. Therefore, government intervention may be necessary to ensure the optimal level of production for both public goods and private goods that generate external benefits.

Without Government Intervention, Society Is Likely to Get Too Little