Public schools, parks, libraries, and roads are paid for largely through tax rev

Question

Public schools, parks, libraries, and roads are paid for largely through tax revenue because

these goods create a free-rider problem.

if they were funded privately, too many of these goods would be produced.

society finds them so valuable that citizens are happy to pay for their full cost.

All of the above are correct.

these goods create a free-rider problem.

if they were funded privately, too many of these goods would be produced.

society finds them so valuable that citizens are happy to pay for their full cost.

All of the above are correct.

Explanation / Answer

Option (a).

Public schools, roads etc create large positive externality. Without an internalization, a positive externality, when left to market forces, results in too few quantity produced and too high price. So these are called Public Goods, which create a free rider problem.

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