We say that individuals get a "warm glow" from giving to a public good if they not only get utility from the public good but also from giving itself. Explain the following: "While warm glow lessens the free rider problem, it cannot eliminate it."
What will be an ideal response?
The private benefits one gets from giving keep us giving even when the number of individuals increases and the free rider problem gets large. However, the free rider problem is still there -- to the extent to which we value the public good, we give too little relative to the efficient level. Only if the only utility we get is from the warm glow does the free rider problem disappear -- but that's because the public goods problem has then disappeared.
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The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
In a market economy,
a. a larger income for one person means a smaller one for another. b. the government answers all the basic economic questions. c. a larger income for one person means it is possible for others to benefit also. d. economic output shrinks as we discover better ways of doing things.
An increase in the nonmonetary cost of purchasing a good
What will be an ideal response?
As price rises, quantity supplied ____________.
Fill in the blank(s) with the appropriate word(s).