Private decisions about consumption of common resources and production of public goods usually lead to anGroup of answer choicesinefficient allocation of resources and no external effects.efficient allocation of resources and external effects.inefficient allocation of resources and external effects.efficient allocation of resources and no external effects.

When property rights are not well established,Group of answer choicesgovernment resources are used inefficiently.the distribution of private goods is unfair.private goods become public goods.markets fail to allocate resources efficiently.

Externalities are minimized ifGroup of answer choicesthe government owns all of the productive resources.there are no private goods.private property rights are well established.there are no public goods.there are no free-riders.

Private producers have no incentive to provide public goods becauseGroup of answer choicesthe government subsidy granted is usually insufficient to enable private producers to make a profit.production of huge quantities of public goods entails huge fixed costs.they cannot avoid the tragedy of the commons.once produced, it will not be possible to exclude those who do not pay for the good.

If the social benefit of consuming a good or a service exceeds the private benefit,Group of answer choicesthe market achieves economic efficiency.a negative externality exists.a positive externality exists.the sum of consumer surplus and producer surplus is maximised.

Economic is the study of the efficient allocation of scarce resources.