Suppose a social entrepreneur needs to raise money for a public good. He has to allocate his fund raising package to activities that persuade people of the importance of the public good and to activities that make people feel good about giving. As the population gets large, which of these do you think he will increasingly emphasize?
What will be an ideal response?
As the population gets large, the free rider problem becomes larger -- which means that just convincing someone that the public good is important won't raise much money. But making someone feel good about giving is all about generating private benefits from giving -- and that is unaffected by how many individuals there are.Thus, one would expect the fund raising to increasingly focus on making people feel good about giving rather than persuading them of the importance of the public good.
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A) the money supply. B) an interest rate. C) the discount rate. D) total bank reserves.
The concept of Nash equilibrium states that
A) no firm can improve their outcome holding the other firm's actions constant. B) all firms are earning the highest possible profit. C) firms make alternating output decisions. D) None of the above
A monopolistic competitor finds its profit-maximizing rate of output by
A) equating the marginal revenue from advertising with the marginal revenue from selling the good. B) setting average revenue equal to average total cost. C) equating marginal revenue and marginal cost. D) equating price and marginal revenue.
Refer to the information provided in Figure 2.6 below to answer the question(s) that follow.
Figure 2.6Refer to Figure 2.6. A shift from ppf1 to ppf2 may be caused by
A. an increased desire for consumer goods. B. a change in consumer tastes. C. an improvement in technology. D. an increase in inflation.