The free-rider problem plagues public goods because
A) public goods are not produced by profit-maximizing firms and hence can be produced only at a loss to society.
B) once public goods are produced it is not possible to exclude anyone from consuming these goods.
C) the government can refuse to serve a citizen.
D) the public doesn't care about public goods.
B
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Suppose that your public library charges a fixed monthly membership fee of $12. Members are allowed to check out as many books as they want under this plan. The average member checks out 4 books per month
Suppose that your public library changes its policy. Now each book costs $3 to check out but there is no longer a monthly membership fee. What effect do you think the new policy will have on the total number of books checked out from your library each month? The new policy is likely to ______the number of books checked out because ________. A) leave unchanged; members have already shown that they are willing to pay $12 to check out 4 books per month B) leave unchanged; the average cost of the library service is the same under both plans C) reduce; the marginal benefit of checking out books is now lower under the new policy D) reduce; the marginal cost of checking out books is now higher under the new policy E) increase; the average benefit of checking out more than 4 books is now higher under the new policy
If policymakers implement an expansionary fiscal policy but do not take into account the potential for crowding out, the new equilibrium level of GDP is likely to
A) be at potential GDP. B) be below potential GDP. C) be above potential GDP. D) There is insufficient information given here to draw a conclusion.
Stationarity means that the
A) error terms are not correlated. B) probability distribution of the time series variable does not change over time. C) time series has a unit root. D) forecasts remain within 1.96 standard deviation outside the sample period.
What is the primary concern about special interest groups?
a. They pressure legislators to enact laws that are not beneficial to the entire society. b. They engage in bribery to ensure that legislation is passed without debate. c. They are employed by politicians to determine the popularity of new legislation. d. They advocate on behalf of corporations that have ties to illegal activity.