A free rider is a person who
a. is harmed by another's actions
b. is subject to a negative externality
c. receives benefits from someone else's market activity but does not pay for them
d. pays less than the full value for a good
e. wins the state lottery on a ticket he found
C
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A rival good is defined as a good for which there are substitutes
Indicate whether the statement is true or false
Incorporation of expectations into economic decision making indicates that in the long run:
a. inflation relates directly to unemployment. b. inflation is inversely related to unemployment. c. the Phillips curve is vertical at the natural rate of unemployment. d. high unemployment is a primary cause of inflation.
When a negative externality exists in the case of a particular good, and if that is not reflected in the price, _____
a. too little of that good is produced and consumed b. too much of that good is produced and consumed c. all resources are taken away from the production of that good d. the government completely prohibits the consumption of that good e. all resources are allocated to the production of that good
Exchange rates allow for a comparison of the trade values of goods and services across countries
a. True b. False Indicate whether the statement is true or false