Question

Why do public goods demonstrate the limitations of a free market economy?

a. they allow consumers to make all of the economic decisions.
b. they allow government to make some economic decisions.
c. they allow governments to control most economic decisions.
d. they prevent consumers from making economic decisions.

Answer 1

The correct answer is B) they allow the government to make some economic decisions.

Public goods demonstrate the limitations of a free market economy in that they allow the government to make some economic decisions.

When the government decides to intervene in the free market economy increasing the spending in order t create programs that benefit the middle and lower classes, affects the market because it influences the price of some goods that are offered by private companies. The government can offer products and services at a lower price to make it more affordable to people who do not have the money to buy products or services of private companies.

Answer 2

b They allow government to make some economic decisions