Which of the following is a disadvantage of government provision of a public good such as national defense?

A) (i)only
B) (i)and (ii)only
C) (i)and (iii)only
D) (i),(ii),and (iii)

Question

Which of the following is a disadvantage of government provision of a public good such as national defense?

A) (i)only 
B) (i)and (ii)only 
C) (i)and (iii)only 
D) (i),(ii),and (iii)

Quizplus · Accepted Answer

(i) Free rider problem: When the government provides a public good like national defense, it is difficult to exclude people from enjoying the benefits of the good even if they don't contribute to its provision. This leads to the problem of free-riders who benefit from the good without paying for it, which can reduce the incentive for individuals to contribute their fair share towards the provision of the good.

(ii) Higher taxes: Government provision of public goods such as national defense requires a significant amount of funding, which can increase the tax burden on citizens. This may result in reduced disposable income, which can negatively impact consumption and economic growth.

(iii) Bureaucratic inefficiencies: Government provision of public goods is often associated with bureaucratic inefficiencies, such as wastage of resources, delays in decision-making, and corruption. These inefficiencies can result in a suboptimal provision of public goods, which can negatively impact the economy and citizens' welfare.

Which of the Following Is a Disadvantage of Government Provision