Author Question: What is the free-rider problem, and how is it related to public goods? What will be an ideal ... (Read 102 times)

cdr_15

  • Hero Member
  • *****
  • Posts: 546
What is the free-rider problem, and how is it related to public goods?
 
  What will be an ideal response?

Question 2

An unregulated natural monopolist will produce the quantity at which
 
  A) average total costs are minimized.
  B) marginal cost equals marginal revenue.
  C) marginal cost equals the long run average cost curve.
  D) the long-run average cost curve intersects the demand curve.



mcarey591

  • Sr. Member
  • ****
  • Posts: 365
Answer to Question 1

The free-rider problem arises from the exclusion principle. Since no one can be excluded from the benefits of a public good, even if they don't contribute towards paying for the good, people have an incentive to let other people pay for the good and to not contribute themselves. If everyone free rides, the good will not get produced. Hence, public goods usually are provided by the government and paid for by taxes.

Answer to Question 2

B



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

In 2006, a generic antinausea drug named ondansetron was approved. It is used to stop nausea and vomiting associated with surgery, chemotherapy, and radiation therapy.

Did you know?

About 80% of major fungal systemic infections are due to Candida albicans. Another form, Candida peritonitis, occurs most often in postoperative patients. A rare disease, Candida meningitis, may follow leukemia, kidney transplant, other immunosuppressed factors, or when suffering from Candida septicemia.

Did you know?

Blastomycosis is often misdiagnosed, resulting in tragic outcomes. It is caused by a fungus living in moist soil, in wooded areas of the United States and Canada. If inhaled, the fungus can cause mild breathing problems that may worsen and cause serious illness and even death.

Did you know?

The most common treatment options for addiction include psychotherapy, support groups, and individual counseling.

Did you know?

In the United States, there is a birth every 8 seconds, according to the U.S. Census Bureau's Population Clock.

For a complete list of videos, visit our video library