In reference to funding industrywide advertising, if the majority of managers free ride, which of the following is likely to occur?
A) The industrywide marginal benefit of advertising will fall below its marginal cost.
B) The industry will maximize its joint profit.
C) The industrywide marginal benefit of advertising will equal its marginal cost.
D) The industrywide marginal benefit of advertising will exceed its marginal cost.
D) The industrywide marginal benefit of advertising will exceed its marginal cost.
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State whether each of the following goods and services is nonrival, nonexcludable or both:
a. A toll road b. A public park c. A lighthouse d. An art museum e. A radio broadcast of "A Prairie Home Companion"
Moral hazard is a problem
A) peculiar to direct finance. B) peculiar to mutual funds. C) arising before a transaction is consummated. D) arising after a transaction is consummated.
Government debt places a burden on future generations if
A) the debt is used to fund the current consumption of its citizens. B) the debt is used to fund the production of investment goods. C) the debt is used to fund schools and highways. D) All of the above are correct.
The balance of trade records information about: a. purchases of U.S. merchandise exports by foreigners
b. purchases of foreign financial assets by Americans. c. American purchases of foreign services while traveling abroad. d. errors and omissions.