Suppose a social entrepreneur needs to raise money for a public good. He has to allocate his fund raising package to activities that persuade people of the importance of the public good and to activities that make people feel good about giving. As the population gets large, which of these do you think he will increasingly emphasize?
What will be an ideal response?
As the population gets large, the free rider problem becomes larger -- which means that just convincing someone that the public good is important won't raise much money. But making someone feel good about giving is all about generating private benefits from giving -- and that is unaffected by how many individuals there are.Thus, one would expect the fund raising to increasingly focus on making people feel good about giving rather than persuading them of the importance of the public good.
You might also like to view...
Which of the following is most accurate?
a. The US has always had a national bank since the early 1800s. b. The US is currently on the gold standard. c. The US used both gold and silver to back its currency during the entire 19th century. d. The US experienced low inflation during the 1970s because it printed very little money. e. The US Federal Reserve is relatively independent compared to similar institutions in most other industrialized nations.
Fred operates his own business, Fred would be counted as employed
a. in both the household and estblishment surveys b. in the household but not the establishment survey. c. in the establishment but not the household survey. d. in neither the household nor the establishment survey.