The free rider problem refers to a situation in which
A) the marginal cost of allowing additional consumers to consume a public good is zero.
B) high income individuals subsidize the production of goods, such as education, that make society better off.
C) people consume a pure public good without payment, even though the good may not be produced if no one chooses to pay.
D) markets fail to allocate resources efficiently when benefits outweigh costs.
C
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When the price of going to a movie rises 5 percent, the quantity of DVDs demanded increases 10 percent. The cross elasticity of demand equals
A) 10.0. B) 0.50. C) -0.50. D) -2.0. E) 2.0.
In the figure above, if the government provides the efficient amount of education, how many students will be accepted?
A) 8 million per year B) 12 million per year C) 10 million per year D) 16 million per year