Asked by Kristian Johnston on May 03, 2024
Verified
"Given that most people like to get 'free stuff,' it follows that goods that are available free of charge are produced and consumed in the proper amounts in a market economy." What is wrong with this statement?
Market Economy
An economic system where supply and demand from consumers and producers determine the production of goods and services.
Free Stuff
Items or services offered without charge, usually as part of a promotional strategy or as incentives.
- Understand the challenge posed by free-riders and how it affects the availability of public commodities.
- Identify the motivational system offered by the patent framework for the generation of novel insights.
Verified Answer
AG
Anushka GuptaMay 09, 2024
Final Answer :
In the absence of government intervention, private markets cannot ensure that goods without prices are produced and consumed in the proper amounts; that is, private markets usually lead to an inefficient allocation of resources when goods are available free of charge.
Learning Objectives
- Understand the challenge posed by free-riders and how it affects the availability of public commodities.
- Identify the motivational system offered by the patent framework for the generation of novel insights.