When does the free-rider problem arise?
A. when policymakers ignore opportunity costs in making decisions
B. when a firm does not have to advertise, because its customers recommend the product to their friends
C. when someone who benefits from a good does not have to contribute to paying for it
D. when production of a good generates pollution
Answer: C
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The problem of vesting and funding are avoided by __________ pension plans
A) both defined benefit and defined contribution B) defined benefit C) defined contribution D) neither defined benefit nor defined contribution
A market in which a single firm can produce, at a lower cost than multiple firms, the entire quantity of output demanded is called:
A. diseconomies of scale. B. government intervention. C. a natural monopoly. D. price gouging.
If the supply curve for housing is perfectly inelastic, a reduction in demand will cause the equilibrium price to: a. rise and the equilibrium quantity to fall
b. rise and the equilibrium quantity to stay the same. c. fall and the equilibrium quantity to fall. d. fall and the equilibrium quantity to stay the same.
Options are more flexible than forward contracts.
a. true b. false