The market mechanism leads to underproduction of public goods because the supply of public goods is hidden.
Answer the following statement true (T) or false (F)
False
The market mechanism leads to underproduction of public goods because everyone would wait for someone else to pay.
You might also like to view...
Bill owns a lawn-care company in Windermere, Florida, whose cost curves are illustrated in the above figure. The market equilibrium price in this perfectly competitive market equals $32 per lawn mowed
At this price, how many lawns will Bill mow per week? A) more than 10 and less than 30 B) 30 C) 40 D) 50 E) 0
Suppose the current exchange rate between the euro and the United States dollar is 1.15 euros per dollar. If interest rates in the United States increase and interest rates in Europe remain unchanged then
A) the demand for dollars will increase. B) the demand for dollars will decrease. C) the demand for euros will increase. D) None of the above answers is correct.
Why doesn't the Fed have both a money supply target and an interest rate target?
A) The Fed does not control money demand. B) Short-term interest rates do not respond to changes in the money supply, which the Fed can control. C) The Fed cannot offset the impact of changes in cash management by the public or changes in lending policies of commercial banks on the money supply. D) Only the level of interest rates matters when we consider rates of growth in real GDP, employment, and rates of price inflation.
Suppose two people start with an initial endowment and trade until they obtain a Pareto-efficient allocation with the corresponding price line
What happens when more people who have the same tastes and endowments as the original two traders are included in the Edgeworth box analysis? A) The price line does not change. B) The price line becomes flatter. C) The price line becomes steeper. D) The price line shifts up or down depending upon how many of each type of trader is included in the analysis.