The free-rider problem arises when:
a. goods cease to be scarce
b. goods are produced by the government.
c. goods can't be provided exclusively to paying customers.
d. the marginal benefit to a private individual outweighs the marginal cost of producing a good.
c
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In a small country, the net national cost of tariff protection is equal to the reduction in consumer surplus minus
A) the gain to foreigners. B) the increase in government revenue and the increase in producer surplus. C) the increase in government revenue. D) the increase in producer surplus. E) the efficiency loss and the consumption side loss.
The problem faced by the lender that the borrower may take on additional risk after receiving the loan is called
A) adverse selection. B) moral hazard. C) transactions costs. D) diversification.
If the supply curve of labor facing the firm is upward sloping, the wage rate and the MLC are identical
Indicate whether the statement is true or false
Differentiate between the current account balance and the capital account balance