Public goods create a free-rider problem because the quantity of the good that a person consumes ________ for that good
A) does not depend on the amount that the person pays
B) increases as that person pays less
C) increases as that person pays more
D) decreases as that person pays more
A
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The social cost of producing a good that generates negative externalities is the sum of the ________
A) average variable cost and average fixed cost of production B) average total cost and the marginal cost of production C) private cost and external costs of production D) total fixed cost and total variable cost of production
All of the following are possible criticisms of social regulation EXCEPT
A) that the costs may outweigh the benefits. B) that social regulation may create anticompetitive effects. C) that the regulations have not resulted in safer working conditions. D) that the regulations lead to higher production costs.
A prominent argument against the use of price ceilings is:
A. they are unfair. B. they lead to a surplus and a waste of society's resources. C. they lead to rent seeking. D. they raise corporate profits.
Considering the market for loanable funds as depicted in the given graph, a change that increased the quantity people want to save at any given interest rate would cause a new equilibrium at a:
A. lower interest rate and a higher equilibrium quantity of funds saved and invested.
B. higher interest rate and a higher equilibrium quantity of funds saved and invested.
C. lower interest rate and a lower equilibrium quantity of funds saved and invested.
D. higher interest rate and a lower equilibrium quantity of funds saved and invested.