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Police and military protection are considered to be public goods. True or false When a good...

Police and military protection are considered to be public goods. True or false

When a good produces a positive externality, the market equilibrium quantity will be LOWER than the social optimal quantity. True or false

When a good produces a negative externality, the market equilibrium quantity will be HIGHER than the socially optimal quantity. True or false

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Answer #1

Police and military protection are considered to be public goods. True >>>> because its benefit incurred to all section of the society not only the elites or some special section of society. Also, their use by one does not hinder the ability of other to use it. Hence they form the part of the public good.

When a good produces a positive externality, the market equilibrium quantity will be LOWER than the socially optimal quantity. True >>>>> since there is a benefit to society that is not captured by the individual

When a good produces a negative externality, the market equilibrium quantity will be HIGHER than the socially optimal quantity. True >>>> the socially optimal quantity would be lower than the market equilibrium quantity

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