Private producers have no incentive to provide public goods because
A) they cannot avoid the tragedy of the commons.
B) production of huge quantities of public goods entails huge fixed costs.
C) once produced, it will not be possible to exclude those who do not pay for the good.
D) the government subsidy granted is usually insufficient to enable private producers to make a profit.
C
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A law that requires hairdressers to undergo many hours of training and acquire a license before they can offer haircuts to the public is an example of a
a. positive externality. b. natural monopoly. c. barrier to entry. d. public good.
A U.S. firm produces sweatshirts in the first quarter of 2010 and adds them to its inventory. In the second quarter of 2010 the firm sells the sweatshirts to consumers. In which quarter(s) does(do) these transactions raise consumption?
a. the first and the second b. the first but not the second c. the second but not the first d. neither the first nor the second