Which of the following is a property of a public good?
a. A public good is free from externalities. b. Many individuals benefit simultaneously.
c. A public good is not subject to free riders. d. A public good is established by law.
b
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The marginal benefit from buying a particular unit of a good
A) is the amount paid for the unit plus the consumer surplus of the unit. B) increases as market price increases. C) is the difference between the amount paid for the unit and the market price of the unit. D) is the difference between the total benefit of the unit and the marginal cost of producing that unit. E) None of the above answers is correct.
The Pre-Existing Condition Insurance Plan is a federally administered part of the Affordable Care Act, and is designed for people with pre-existing medical conditions to obtain insurance. By offering health insurance to all U.S
citizens with pre-existing medical conditions, the Pre-Existing Condition Insurance Plan eliminates ________ for both the insurer and the insured, and eliminates ________ for the issuer of the insurance policy. A) the principal-agent problem; moral hazard B) adverse selection; the principal-agent problem C) asymmetric information; adverse selection D) moral hazard; adverse selection