The free-rider problem plagues public goods because
A) public goods are not produced by profit-maximizing firms and hence can be produced only at a loss to society.
B) once public goods are produced it is not possible to exclude anyone from consuming these goods.
C) the government can refuse to serve a citizen.
D) the public doesn't care about public goods.
Answer: B
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If a series of severe storms in the Atlantic Ocean drastically significantly disrupted the transatlantic slave trade, which would most accurately describe the market for indentured servants in colonial America?
a. The price and quantity of servants would increase. b. The price and quantity of servants would decrease. c. The price of servants would increase and the quantity of servants would decrease. d. The price of servants would decrease and the quantity of servants would increase.
If a firm experiences constant returns to scale at all output levels, then its long-run average total cost curve would
a. slope downward b. be horizontal c. slope upward d. slope downward for low output levels and upward for high output levels e. slope upward for low output levels and downward for high output levels
Refer to the diagram. The vertical distance between ATC and AVC reflects:
A. the law of diminishing returns.
B. the average fixed cost at each level of output.
C. marginal cost at each level of output.
D. the presence of economies of scale.
If the demand and supply curves for a commodity shift to the right by the same amount, then in comparison to the initial equilibrium, the new equilibrium will be characterized by:
A) a higher quantity and price. B) a lower quantity and a higher price. C) the same quantity and a lower price. D) a higher quantity and the same price.