The prisoner's dilemma arises when people have an incentive to let others pay for the public good and then take advantage of those purchases made by others

Given that milk and cookies are complements, suppose the price of flour (an ingredient in cookies) rises. What happens in the market for cookies?

A) The equilibrium price and quantity rise. B) The equilibrium price rises, and the equilibrium quantity falls. C) The equilibrium price and quantity fall. D) The equilibrium price falls, and the equilibrium quantity rises.

Professor Plum, who earns $100,000 per year, read in the paper today that the university pays its basketball coach one million dollars per year in exchange for his agreement to remain at the university for at least three more years. The coach earns more than Professor Plum because:

A. universities value sports more than academics. B. the coach has more human capital than does Professor Plum. C. the coach is able to earn economic rent due to his unique talents. D. the demand for sporting events exceeds the demand for college degrees.