With regard to a public good provided by the government:
A. individuals reveal their demand when they buy the good.
B. a free rider problem is unlikely.
C. individuals have an incentive to exaggerate their willingness to buy the good if they will not be taxed.
D. individuals have an incentive to conceal their willingness to buy the good if they will not be taxed.
Answer: C
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A nominal value is measured:
A. by indexing. B. using the consumer price index. C. in terms of current dollar value. D. in physical terms.
To correct a nominal quantity for changes in the price level, one should:
A. multiply it by a price index. B. divide it by a price index. C. add a price index to it. D. subtract a price index from it.
A government policy to improve farm incomes by supporting agricultural prices at a level above equilibrium will reduce consumer's surplus
Indicate whether the statement is true or false
Under which one of the following market structures are sellers most likely to consider the reaction of rival sellers when they set the price of their product?
a. price-taker firms b. pure monopoly c. price searchers with low entry barriers d. oligopoly