In economics, a free rider is the term used for a person who
a. receives the benefit of a good without contributing to its costs of production.
b. purchases an item during a "buy one, get one free" sale.
c. lives in a town in which the city provides free bus service.
d. pays for exactly what they receive.
A
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It is the role of ________ to transfer funds from savers to borrowers
A) corporate governance B) the federal government C) an economy's financial system D) the Federal Reserve
Assuming that the median voter model accurately explains how public sector decision are made, resources will be allocated efficiently if _____
a. preferences are single-peaked and individuals prefer outcomes closer to their preferred outcome rather than outcomes farther away b. rational ignorance and cyclical majorities are not present c. resources were already allocated efficiently in the private sector d. the median voter's demand is the same fraction of total demand as his tax share is of total taxes
Explain what may occur when a buyer and a seller have unequal amounts of limited information. Describe two different types of problems that may arise when asymmetric information exists
What will be an ideal response?
Appendix: An incentive-compatible mechanism for revealing true willingness to pay in a private value auction is
a. impossible b. a Dutch auction c. a second-highest sealed bid auction d. a sequential auction with open bidding e. a discriminatory price all-or-nothing auction.