Markets are often inefficient when negative externalities are present because（）
A. private costs exceed social costs at the private market solution
B. externalities cannot be corrected without government regulation
C. social costs exceed private costs at the private market solution
D. production externalities lead to consumption externalities
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The provision of a public good generates a（）
A. positive externality, as does the use of a common resource
B. positive externality and the use of a common resource generates a negative externality
C. negative externality, as does the use of a common resource
D. negative externality and the use of a common resource generates a positive externality
In a market economy, government intervention（）
A. will always improve market outcomes
B. reduces efficiency in the presence of externalities
C. may improve market outcomes in the presence of externalities
D. is necessary to control individual greed
The free-rider problem（）
A. forces the supply of a public good to exceed its demand
B. results in common resources becoming club goods
C. explains why many local governments supply public goods
D. results in public goods becoming private goods
Inefficiency can be caused in a market by the presence of（）
A. market power
B. externalities
C. imperfectly competitive markets
D. All the answers are correct
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