When the free-rider problem occurs in a market for a good, what is true of the quantity of the good supplied relative to the efficient quantity of the good?
A. The good is typically oversupplied in a market where the free-rider problem occurs.
B. When the free-rider problem occurs, the good can be provided completely free of charge.
C. The good is typically undersupplied in a market where the free-rider problem occurs.
D. The good is typically efficiently supplied in a market where the free-rider problem occurs.
Answer: C
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George has a $600 annual entertainment budget that he uses to buy trips to the movies and dinners at local restaurants. The figure above shows indifference curves and budget lines for these two goods. The price of a movie is $15
a) Along budget line BL1, what is the price of a dinner? b) What combination of dinners and movies will George select along budget line BL1? c) Budget line BL2 represents a change in the price of dinners from that along BL1. What is the new price of dinners along this budget line? d) What combination of dinners and movies will George select along budget line BL2? e) Use the information in this problem to give two points on George's demand curve for dinners.
The Clayton Act:
A) was passed in 1985 over the objections of then President Reagan. B) outlaws racial discrimination in the practice of business. C) outlaws the ownership of stock by the U.S. government unless it is in public enterprises. D) outlaws price discrimination unless based on cost differences.
The use of quarterly data to develop the forecasting model Yt = a +bYt?1 is an example of which forecasting technique?
a. Barometric forecasting b. Time-series forecasting c. Survey and opinion d. Econometric methods based on an understanding of the underlying economic variables involved e. Input-output analysis
Which of the following signals a normative economic statement?
a. is b. has been shown to be c. should be d. can be e. is more than