When a good is nonexcludable, then individuals
A. will purchase the good for more than what it cost to produce the good.
B. can obtain the benefits of the good without paying for it.
C. have an incentive to become free riders.
D. will purchase more than the optimum amount.
E. b and c
Answer: E
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A fixed exchange rate can be maintained by a government as long as it has sufficient
a. supplies of its own currency. b. foreign reserves. c. gold and other precious metals. d. tax revenues.
The real interest rate is the interest rate corrected for inflation
a. True b. False Indicate whether the statement is true or false
The tit-for-tat strategy only works for a prisoner's dilemma that:
A. is repeated. B. is played only one time. C. does not have a Nash equilibrium. D. has only one Nash equilibrium.
The "housing bubble" discussed in the text book refers to:
A. housing prices rising much more quickly than the rest of prices in the economy. B. an unexplained increase in the demand for houses which caused the prices of houses to rise. C. a supply shock to the housing market, which caused housing prices to increase. D. housing prices within a certain area of the U.S. rising disproportionately with the rest of houses in the economy.