Private producers have no incentive to provide public goods because
A) they cannot avoid the tragedy of the commons.
B) production of huge quantities of public goods entails huge fixed costs.
C) once produced, it will not be possible to exclude those who do not pay for the good.
D) the government subsidy granted is usually insufficient to enable private producers to make a profit.
C
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You have just opened a new Italian restaurant in your hometown where there are three other Italian restaurants
Your restaurant is doing a brisk business and you attribute your success to your distinctive northern Italian cuisine using locally grown organic produce. What is likely to happen to your business in the long run? A) If your success continues, you will be likely to establish a franchise and expand your market size. B) Your competitors are likely to change their menus to make their products more similar to yours. C) If you continue to maintain consistent quality, you will be able to earn profits indefinitely. D) Your success will invite others to open competing restaurants and ultimately your profits will be driven to zero.
Suppose you are the manager of Sweet Aroma, a firm that specializes in air freshener. To make your air freshener, you purchase apple skins from apple juice manufacturers. If the demand for apple juice increases, this will cause the production of apple skins to ________ and the price of apple skins to ________.
A) decrease; rise B) increase; rise C) decrease; fall D) increase; fall
Give an appropriate remedy for correcting excessive pollution and note any difficulties in implementing it.
What will be an ideal response?
The essential reason some species of whales have nearly been driven to extinction is that:
A. it is difficult to define and enforce property rights to whales. B. experienced whalers find it easy to catch whales. C. the demand for whales is extremely high. D. the price of whales is very low.