Why do street performers face a free-rider problem? How do they try to reduce this problem?
Please provide the best answer for the statement.
Street performers provide public entertainment. With private entertainment, people can be charged admission and thus pay for the entertainment. When street performers entertain, they must rely on the voluntary payments of the viewers. Not all viewers pay for this entertainment and thus these people are considered free riders by the street performers. These people who do not pay get the benefit of the performance without paying the cost. They try to reduce this problem by involving the crowd in the entertainment so they feel more obligated to pay. Sometimes their activity is based on the size of the donation.
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A) inelastic. B) elastic. C) unit elastic. D) perfectly elastic. E) perfectly inelastic.
Assume individuals consider only the long run effects of changes in future macro variables when forming expectations of future output and future interest rates. Suppose individuals expect future government spending to increase. Given this information, individuals will expect
A) an increase in the expected future interest rate and no change in expected future output. B) an increase in the expected future interest rate and an increase in expected future output. C) an increase in the expected future interest rate and a reduction in expected future output. D) an increase in the expected future interest rate and an ambiguous effect on expected future output.