When city beautification programs are funded privately:
A)only contributing citizens are likely to benefit from a more beautiful city.
B)only free riders are likely to benefit from a more beautiful city.
C)an underallocation of resources toward the beautification project is likely to occur relative to what is socially efficient.
D)none of the above

Question

When city beautification programs are funded privately:
A)​only contributing citizens are likely to benefit from a more beautiful city.
B)​only free riders are likely to benefit from a more beautiful city.
C)​an underallocation of resources toward the beautification project is likely to occur relative to what is socially efficient.
D)​none of the above

Quizplus · Accepted Answer

When city beautification programs are funded privately, an underallocation of resources is likely to occur relative to what is socially efficient. This is because private individuals or organizations who fund such programs are only looking for personal benefits, such as enhanced property values, and may not take into account the positive externalities that beautiful cities have on the community as a whole. Therefore, without governmental intervention, the level of funding for beautification programs may be insufficient to achieve socially optimal levels.

When City Beautification Programs Are Funded Privately