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Suppose that the Anytown city government asks private citizens to donate money to support the town's annual holiday lighting display. Assuming that the citizens of Anytown enjoy the lighting display, the request for donations suggests that:_______
a. the display creates negative externalities.
b. government should tax the producers of holiday lighting.
c. resources are currently overallocated to the provision of holiday lighting in Anytown.
d. resources are currently underallocated to the provision of holiday lighting in Anytown.

Answer :

Answer:

d. resources are currently underallocated to the provision of holiday lighting in Anytown.

Explanation:

Suppose that the Anytown city government asks private citizens to donate money to support the town's annual holiday lighting display. Assuming that the citizens of Anytown enjoy the lighting display, the request for donations suggests that resources are currently underallocated to the provision of holiday lighting in Anytown.

Resources are underallocated when resources are poorly managed and it means governement have more resources than it is required to complete the job, which lead to the wastage of money and potential to produce more. Economists consider governement to be of not use if resources are under allocated.

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