The problem with public goods is that
a) too many people are excluded from their use and must find alternatives in the private sector
b) the opportunity to act as a free rider is a disincentive to pay for public goods
c) they compete with private goods, driving companies out of business
d) they could be provided more efficiently by private companies
e) they are distributed according to willingness to pay rather than ability to pay
b) the opportunity to act as a free rider is a disincentive to pay for public goods
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Which of the following is likely to shift the demand curve for carpenters rightward, assuming all else equal?
A) A fall in the wage rate of carpenters B) A fall in the price of wood C) A rise in the wage rate of carpenters D) A rise in the price of wood
A large and diverse community has suffered a two-month drought
In attempting to deal with the crisis, four identifiable groups emerge: one decides to pray, a second decides to engage in a rain dance, a third decides to use modern meteorological principles and "seed" the clouds, and a fourth decides to do nothing. From the standpoint of economic theory, A) individuals in the first and second groups are acting irrationally and inefficiently. B) individuals in each group are acting efficiently, given their own values and understanding of ends and means. C) the third group is the smartest. D) the fourth group is the most selfish.
Suppose the current real interest rate is 4 percent and the equilibrium real interest rate is 3 percent. Then
A) prices rise and inflation occurs. B) there is a surplus of loanable funds. C) there is a shortage of loanable funds. D) there is neither a shortage nor surplus of loanable funds.
Why does a consumer spend the entire budget?
What will be an ideal response?