For certain public projects such as building a dam on a river or a bridge to an island, what procedure is a government likely to use to determine what quantity of a public good should be supplied?
A)It conducts public surveys to determine if consumers want the product.
B)It hires economists to estimate the market demand for the product.
C)It takes a vote in Congress.
D)It evaluates the costs and benefits of producing the good.

Question

Quizplus · Accepted Answer

The government is likely to evaluate the costs and benefits of producing the public good to determine the quantity of it that should be supplied. This involves analyzing the costs of building and maintaining the project against the benefits it will provide to society. Factors such as economic efficiency, equity, and the public interest will also be considered in the decision-making process. Surveys and estimation of market demand may be used in some cases to inform the decision, but they are not the primary methods used to determine the quantity of a public good to be supplied. A vote in Congress may be used to allocate funding for the project, but it would not be the sole method used to determine the quantity of the public good to be supplied.

For Certain Public Projects Such as Building a Dam on a River