When the free rider problem is present in a market:
A. the good is rival in consumption.
B. the good will likely be overconsumed.
C. what people pay often does not reflect the real value they put on a good.
D. the good is easily excludable.
Answer: C
You might also like to view...
When a forest is logged, it is possible for the logging to create "soil runoff," a situation in which the soil, no longer protected by trees, erodes and silts a river miles downstream from the logging area
Is soil runoff created by logging in Montana that ruins a river an example of a private cost to the lumbering company or an external cost?
In a Mexican factory, each worker can produce 1/8 of a vase or 1/16 of a statue per hour. If there are 400 workers at the factory, the maximum number of vases that could be produced in one hour is
a. 400 b. 25 c. 50 d. 100 e. 80
When there is a labor union, the labor supply curve is
a. a horizontal line at the desired wage b. positively sloped c. negatively sloped d. a vertical line at the desired level of employment e. backward bending
Economic analysis assumes that Select one:
a. Individuals act only out of selfish motives. b. Although individuals are at times selfish and at times unselfish, only their selfish actions may be predicted. c. People are basically humanitarian, and their actions are, therefore, impossible to predict. d. Changes in the personal benefits and costs associated with a choice will exert a predictable influence on human behavior.