Which of the following types of goods is subject to the free-rider problem?
A. a private good
B. a product that creates a positive externality
C. a public good
D. a product that creates a negative externality
Answer: C
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Since 2000, the U.S. government has generally had a government budget ________ and so the national debt has ________
A) surplus; decreased B) surplus; increased C) deficit; decreased D) deficit; increased E) deficit; not changed
As the number of firms in a market decreases, the supply curve will shift to the left and the equilibrium price will rise
Indicate whether the statement is true or false
In which of the following cases would the price elasticity of demand be expected to increase?
A) The number of close substitutes for the good increases. B) The time period under consideration decreases. C) The cost of the good relative to total income decreases. D) The supply of the good increases.
Match each of the following characteristics or scenarios with either the term negative externality or the term positive externality.
a. Overallocation of resources: b. Tammy installs a very nice front garden, raising the property values of all the other houses on her block: c. Market demand curves are too far to the left (too low): d. Underallocation of resources: e. Water pollution from a factory forces neighbors to buy water purifiers: