The free rider problem is caused by the:
A. nonexcludability of a good leading to the undersupply of it.
B. incentive to oversupply the good since it is nonrival in consumption.
C. "rivalness" in consumption of a good leading to the overconsumption of that good.
D. "rivalness" in consumption of a good leading to the undersupply of it.
A. nonexcludability of a good leading to the undersupply of it.
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If firms in a price-taker industry were forced to install antipollution devices that increased their production costs, we should expect
A) the cost curves for the firms in this industry to shift downward. B) the market price of the product to decrease. C) that the firms in the industry would suffer long-run economic losses. D) that the firms in the industry would earn normal economic profits in the long run, as the higher production costs were passed along to consumers in the form of higher prices.
During a recession, spending on ________ tends to fall more dramatically than spending on ________
A) nondurable goods; durable goods B) durable goods; nondurable goods C) food; cars D) necessities; luxuries
An exogenous rise in government expenditures will have the same effect on GDP as an equal rise in either autonomous ________ or autonomous ________
A) consumption; investment B) taxes; consumption C) savings; investment D) taxes; investment
Which of the following would shift the short-run Phillips curve to the right?
a. an negative supply shock b. an increase in inflationary expectations c. a decrease in inflationary expectations d. either (a) or (b)