A fundamental reason that governments provide public goods is that
A) those goods are subject to the free-rider problem.
B) negative externalities are part of the production process of those goods.
C) public goods are merit goods.
D) those goods are perfectly divisible.
Answer: A
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A distinguishing characteristic of public transfer payments is that:
A. They include wages to government workers B. They are counted as part of government purchases in the calculation of the gross domestic product C. They include the cost of maintaining public parks D. They involve no contribution to current production in return
Because the seller of a used car has more information than the buyer:
A. the problem of bargaining imbalance occurs. B. the problem of adverse selection occurs. C. the problem of information overload occurs. D. the problem of moral hazard occurs.