A collective-action problem is a situation in which:
A. people are often reluctant to voluntarily pay for goods and services that provide benefits for everyone, even for those who don't pay.
B. people are reluctant to voluntarily pay for goods and services because they believe their individual contribution will not make a difference.
C. a group of people stand to gain from an action that is not rational for any of the members to undertake individually.
D. a small group of individuals gains power that sways the decisions of society to their personal gain at the expense of the larger society.
C. a group of people stand to gain from an action that is not rational for any of the members to undertake individually.
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Diseconomies of scale can be caused by
A) the law of diminishing returns. B) bureaucratic inefficiencies. C) increasing advertising and promotional costs. D) All of the above
During periods when the inflation rate fluctuates widely, _____
a. the nominal interest rate and the real interest rate are identical b. all money prices rise at the same rate, causing relative prices to increase c. suppliers link the selling prices of their goods to the overall inflation rate d. uncertainty about changes in relative prices causes a decrease in economic efficiency e. all money prices increase at the same rate, leaving relative prices constant
The table above presents the production possibilities of Farmer Brown. Use these data to calculate Farmer Brown's opportunity cost of additional beef as Farmer Brown moves from point A to B to C to D
Also use the data to calculate Farmer Brown's opportunity cost of additional wheat as Farmer Brown moves from point D to C to B to A. Based on these costs, does Farmer Brown use resources that are more productive in one activity than the other? Explain your answer.
Insurance companies:
A. profit from the difference between the premiums paid and the expected value of clients' payouts. B. only profit by selling to risk neutral clients. C. must charge less than the expected value of payout, otherwise they would go out of business. D. All of these statements are true.