Without government intervention, public goods tend to be
A)overproduced and common resources tend to be overconsumed.
B)overproduced and common resources tend to be underconsumed.
C)underproduced and common resources tend to be overconsumed.
D)underproduced and common resources tend to be underconsumed.

Question

Quizplus · Accepted Answer

Without government intervention, individuals and businesses do not have any incentive to produce and provide public goods as there are no direct benefits to them. As a result, public goods are likely to be underproduced. On the other hand, common resources, such as air and water, are non-excludable, meaning that individuals cannot be excluded from using them even if they do not pay. This leads to overconsumption and depletion of these resources.

Without Government Intervention, Public Goods Tend to Be