Moderate

Define public 'goods' and public 'bads'.

Correct answer: A. Public goods are those in which unrestrained market competition is not effective (i.e. hospitals). Public bads are the result unrestrained market competition (i.e. pollution)

  • A. Public goods are those in which unrestrained market competition is not effective (i.e. hospitals). Public bads are the result unrestrained market competition (i.e. pollution)
  • B. Public goods are those goods that are free for the public. Public bads are those that are extremely expensive
  • C. Public goods are positive intangible sentiments widespread in the public (i.e. happiness, pride, nationalism). Public bads are negative attributes that are widespread in the public (i.e. violence, crime)
  • D. All of the above

Explanation

Public goods are benefits that markets may undersupply because people cannot easily be excluded from them, while public bads impose broadly shared costs such as pollution. Option a is the closest available description, although its example of hospitals is not a precise definition of a public good.

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