Final answer:
If the government underproduces a public good like national defense, the nation may become more vulnerable to external threats, due to the public good's non-excludable and non-rivalrous characteristics and the associated free rider problem that hinders private production.
Step-by-step explanation:
When the government does not produce enough of a public good such as national defense, the country may face significant risks including reduced security from external threats and increased vulnerability to attacks. Public goods are typically non-excludable and non-rivalrous, meaning they are available to all without direct charge and one person's use does not reduce availability to others. These characteristics make it unfeasible for private companies to produce and charge for public goods effectively, leading to what is known as the free rider problem, where individuals benefit from goods or services without paying for them.
To manage the protection and security that a public good like national defense provides, the government uses its ability to tax and its access to the nation's resources. This centralized approach ensures that the country can build armed forces, develop defense plans, and maintain intelligence, tasks that are unmanageable for private entities. If the government underproduces this public good, there may be insufficient resources to protect the nation effectively, potentially compromising overall safety and welfare.