Public goods are characterized by the:
a. free-rider problem.
b. adverse selection problem.
c. principal-agent problem.
d. moral-hazard problem.
A
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
Suppose a competitive market with adverse selection has settled into a pooling equilibrium where everyone is offered the same price. If firms then screen consumers, the outcome may and may not be more efficient.
Answer the following statement true (T) or false (F)
Which of the following statements is true of price makers?
A) The supply curve of price makers is downward sloping. B) The demand curve that price makers face is upward sloping. C) Price makers set the price of a good after they determine how much to produce. D) Price makers determine how much to produce after they set the price of a good.
An increase in the price of gasoline will cause a(n)
a. an increase in the quantity of gasoline demanded b. decrease in the quantity of gasoline demanded c. no change in the quantity of gasoline demanded d. increase in the demand for gasoline e. decrease in the demand for gasoline