Taxes that are enacted to mitigate the effects of negative externalities are sometimes called

A free-rider problem occurs when the

A) good is excludable. B) good is offered at no charge. C) good is rival. D) good is nonexcludable.

Political candidates often hold fundraisers by charging "per plate" for dinner. Wendy purchased four tickets to a $1,000 per plate dinner for a local city council candidate. Does this transaction benefit both parties?

A) No, political candidates should never be allowed to overcharge for a fundraising dinner as that limits the number of people who can afford to attend. B) Yes, it was a voluntary exchange that benefited both parties. C) No, Wendy paid too much for four dinners. D) Yes, but only if the dinners served actually cost $1,000 each.