Question

We say that private markets will tend to ___________ resources to public goods because no single buyer can appropriate all of the ___________ that such goods provide.

Answer 1

Answer:

under-allocate; benefits

Explanation:

Private firms have no motivation to produce public goods because they have to the public goods shares benefits to a lot of receivers. As a result, the benefits to the private producers are lower than if they allocate their resources to private goods, the buyer of that goods then can receive entirely the benefits of the goods.