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- Subject
- Public Goodseconomics-mcqs › public-goods
- Published
- 1 Jun 2019
- Last updated
- 28 May 2026
There are 20 neighbors on a street, each valuing the street repair at €3,000. The total cost to fix the street is €40,000. Which of the following statements is correct?
Multiple choice question for Public Goods. Select an option, then review the explanation below.
Explanation
Since the combined valuation of all neighbors (20 × €3,000 = €60,000) exceeds the repair cost (€40,000), it is efficient for the government to levy a €2,000 tax on each resident to cover the repair expense. This collective approach maximizes overall benefit compared to individual payments or not repairing.
More Public Goods MCQs
Practice related questions from the same subject.
- 1.What term describes a good from which individuals can be prevented from accessing or using it?
- 2.Which of the following best illustrates a common resource?
- 3.Which type of good is impacted by a negative externality in a way that reduces market efficiency?
- 4.Which type of good does a positive externality influence market efficiency similarly to?
- 5.Who is described as a free rider in economic terms?