The private returns to investment in a particular type or location of
capital may fall short of the social returns
1. because the services of some types of capital,
particularly knowledge, can be simultaneously used by everyone without appropriate
compensation to its owners.
2. because institutional conditions do not make it
possible for owners of some capital types to claim the full income produced
by them.
3. because institutional conditions cannot prevent
theft of capital.
4. for all of the above reasons.
Choose the correct option.