The free-rider problem occurs when:
A. people who pay for a good or service cannot be excluded from enjoying it.
B. buyers pay less than their reservation price.
C. sellers receive more than their reservation price.
D. people who do not pay for a good or service cannot be excluded from enjoying it.
Answer: D
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Rank the following goods from least to most elastic: gasoline, Unocal gasoline, gasoline at Murph's Unocal Station
A) Gasoline, Unocal gasoline, gasoline at Murph's Unocal Station B) Gasoline, gasoline at Murph's Unocal Station, Unocal gasoline C) Gasoline at Murph's Unocal Station, Unocal gasoline, gasoline D) Unocal gasoline, gasoline at Murph's Unocal Station, gasoline E) Unocal gasoline, gasoline, gasoline at Murph's Unocal Station
Profits will be maximized when the slope of the total revenue curve and the slope of the total cost curve equal zero.
Answer the following statement true (T) or false (F)
Movie theaters charge lower prices to children and senior citizens because
a. they feel sorry for them. b. they go to more movies, so they get price breaks. c. their elasticity of demand for movie tickets is higher. d. they have more time to attend movies.
Every time new firms enter a monopolistic competitive market, the firms already in the market find their
a. price rising to make up for lost customers b. cost curves shifting upward, reflecting increased inefficiency c. profits increasing because total revenues increase with more firms in the market d. demand curves becoming more inelastic as only loyal customers remain e. demand curves shifting inward to the left