Which of the following is a disadvantage of government provision of a public good such as national defense? i) The government does not know the exact willingness of consumers to pay for the public good.
Ii) The free-rider problem is more likely to occur when the government provides a public good than when the private sector provides a public good.
Iii) Taxpayers do not agree on the optimal quantity of the public good that the government should provide.
A) i) only
B) i) and ii) only
C) i) and iii) only
D) i), ii), and iii)

Question

Quizplus · Accepted Answer

The government may not know the exact willingness of consumers to pay for a public good, and taxpayers often disagree on the optimal quantity of the public good to be provided. However, the free-rider problem is less of an issue with government provision, as it is more prevalent in private provision.

Which of the Following Is a Disadvantage of Government Provision