When the free rider problem is present in a market:
A. what people pay often does not reflect the real value they put on a good.
B. the good will likely be over consumed.
C. the good is rival in consumption.
D. the good is easily excludable.
A. what people pay often does not reflect the real value they put on a good.
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"As part of the financial crisis bailout plan in 2009, the Federal Reserve bought stakes in banks. This policy will result in an increase in the inflation rate." This is an example of
A) a positive statement. B) a normative statement. C) a microeconomic statement. D) an economic model.
Consider an investment with the following payoffs and probabilities: State of the Economy Probability Return GDP grows slowly .70 1,000 GDP grow fast .30 2,000 Let the expected value in this example be 1,300 . How do we find the standard deviation of the investment?
a. ? = ? { (1000-1300)2 + (2000-1300)2 } b. ? = ? { (1000-1300) + (2000-1300) } c. ? = ? { (.5)(1000-1300)2 + (.5)(2000-1300)2 } d. ? = ? { (.7)(1000-1300) + (.3)(2000-1300) } e. ? = ? { (.7)(1000-1300)2 + (.3)(2000-1300)2 }
Which of the following distinguishes corporations from the other forms of business organization?
a. Corporations can issue stock. b. Corporations are permitted to operate in other countries. c. Corporations can produce more than one product. d. Corporations can offer both products and services. e. Corporations are subject to unlimited liability.
If a 10 percent rise in airfares leads to a 5 percent increase in total expenditures on air travel, the price elasticity of demand for air travel in this range must be
a. 2. b. elastic. c. 0.5. d. inelastic.