Suppose the government chooses to provide a public good at a zero price, and the increased consumption makes it so that one person’s use begins to interfere with others’ use. Think of a crowded road or a crowded park. What should the government do now to keep this market efficient?Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.aStop providing the good.bClose the goods to users at peak demand times.cPay consumers to use the good.dAdd prices that reflect the costs of an individual’s use of the good.

Consider a good with external costs. Which of the following best describes why the market does not produce an allocatively efficient amount?Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.aThe marginal benefit to consumers exceeds the marginal private cost of production and the marginal social cost of production.bThe marginal social cost exceeds the marginal social benefit.cThe marginal social benefit exceeds the marginal social cost.dThe marginal private cost of production and the marginal social cost exceed the marginal benefit to consumers.Unanswered2 attempts left

Once a government has introduced a proper (that is, economically efficient) policy to address the market failure, the price of a good that has external benefits will be ______________ than its free market price and the price of a good that has external costs will be ______________than its free market price.Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.ahigher; lowerbhigher; higherclower; lowerdlower; higher

Without government intervention, public goods will be __________ provided by markets alone. Group of answer choicesequitablyunderefficientlyoverly

In addition to taxes, what other regulation could the government impose that would achieve the efficient outcome?Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.aThe government could provide subsidies.bThe government would have to mandate that there be no quantity produced greater than the allocatively efficient quantity.cImposing a tax is the only option available to the government.

Consider a good produced in a competitive market that has external costs. Too ______________ of the good will be produced for economic efficiency and the price will be ______________ than the price that will convince consumers to purchase the efficient amount.Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.alittle; lowerblittle; highercmuch; lowerdmuch; higher