The local welfare committee of Wadonia are planning a new swimming pool that will be accessible to the public at no cost. The committee has requested all households in a 10-metre radius of the pool to contribute $50 each to cover the cost of construction. Unfortunately, the committee is having a hard time meeting its funding goal largely because of the free rider problem. One official suggested
that the free rider problem could be minimized by asking all households within a 15-metre radius to contribute to the construction fund. Which of the following is likely to be true?
a. The plan will definitely work as the free rider problem will be minimized completely.
b. The committee should reject this plan as the funding requirements will never be met.
c. The local jurisdiction should impose a rule so that every individual in the locality has to pay for the pool.
d. The plan might allow the pool to reach its funding, but the free rider problem will still exist.
d
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In a free market, the market price and quantity in the above figure will adjust to equilibrium values of
A. $1 per gallon and 50 million gallons. B. $2 per gallon and 60 million gallons. C. $4 per gallon and 10 million gallons. D. $2 per gallon and 30 million gallons.
Refer to the figure above. What does the region EFG represent?
A) Consumer surplus B) Producer surplus C) Deadweight loss D) Economic profit
Suppose a price searcher faces the following demand curve: At $100, $90, $80, $70, and $60, the quantity demanded is 1, 2, 3, 4, and 5 units respectively. Which statement below is true?
A) Total revenue is $100. B) Total revenue is $190 when 2 units are sold. C) Total revenue is $400 when 5 units are sold. D) Marginal revenue is $80 when the price is $90.
Factors that shift the demand schedule for money include all of the following EXCEPT
A) interest rate paid on money. B) payment technology. C) interest rate paid on non-money assets. D) wealth.