Government can overcome the free rider problem by collecting taxes and using the funds to provide individuals with nonexcludable public goods that they want to buy but the market cannot provide
Indicate whether the statement is true or false
True
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Figure 19-2
In Figure 19-2, the derived demand curve is the line
A. ABCD. B. CDEF. C. DEF. D. ABCDEF.
Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
In equilibrium, rent seeking eliminates the
A) deadweight loss. B) economic profit. C) consumer surplus. D) demand for the product. E) opportunity to price discriminate.