Nonexcludability is a matter of degree. As the cost of excluding individuals rises, _____
a. the marginal cost of provision increase
b. the marginal cost of provision decreases
c. the probability of free riding declines
d. the probability of free riding increases
d
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An efficient economy would set the marginal product in the traditional sector
A) lower than that in the modern non-traditional sector. B) higher than that in the modern sophisticated sector. C) equal to that in the modern sophisticated sector. D) lower in the relatively capital intensive sector. E) higher in the relatively capital intensive sector.
Which is a feature of a purely competitive market?
A. Price differences between firms producing the same product B. Significant barriers to entry into the industry C. The industry's demand curve is perfectly elastic D. Products are standardized or homogeneous