When does the free-rider problem arise?
A) when someone who benefits from a good does not have to contribute to paying for it
B) when a firm does not have to advertise, because its customers recommend the product to their friends
C) when policymakers ignore opportunity costs in making decisions
D) when production of a good generates pollution
A
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If the area between the line of equality and the Lorenz curve is 1,250, and the entire area beneath the line of equality is 5,000, the Gini ratio is
A) 0.25. B) 4.00. C) 0.33. D) 0.80.
Even though airfares have been increasing, the revenue earned by airlines has declined. Based on this statement, what may be concluded about price, cross-price, or income elasticity of demand?
What will be an ideal response?
Determinants of the price elasticity of supply are:
A. adjustment time, whether the good is a luxury or a necessity. B. availability of inputs, adjustment time. C. flexibility of the production process, whether the good is a luxury or a necessity. D. availability of inputs, whether the good is a luxury or a necessity. AACSB: Reflective Thinking
Higher rates of productivity growth are most closely associated with higher rates of
a. consumer spending. b. investment spending. c. government spending. d. import spending.