One way to solve the free-rider problem is:
A. tax everyone an equal amount for the good.
B. have the government provide the good at a certain cost.
C. make the good or service more excludable.
D. tax those who truly value the good.
Answer: C
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When examining the financial status of households, wealth is
A) synonymous with income. B) a flow variable whereas income is a stock variable. C) a stock variable and includes both tangible assets and human capital. D) not as important as income because wealth does not change over time.
A shortage occurs when the quantity demanded exceeds the quantity supplied
a. True b. False Indicate whether the statement is true or false
The permanent income hypothesis indicates that increased savings will cause an increase in long term income
a. True b. False Indicate whether the statement is true or false
Which statement is true about the perfect competitor?
A. Firms operate at peak efficiency in the short run. B. Economic profits are greater than accounting profits. C. Firms that survive must make a profit in the long run. D. The demand curve is perfectly elastic for each firm.