How does government provision of public goods solve the free rider problem?
A) Governments can impose compulsory taxes to pay for public goods.
B) Governments can convert nonrival goods to rival goods by assigning property rights.
C) Governments can tax public goods to prevent over-use of the resources.
D) Governments cannot solve the free rider problem
A
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Politicians have an incentive to favor short-run policies because _____
a. because voters suffer from myopia b. of special interests c. they may be voted out of office before long-run policies bear fruit d. of rational ignorance
Which of the following is an example of price stickiness?
a. Stark Inc. always lowering the price of its products even when it experiences a decrease in production costs b. Flavors of the East, a restaurant, not change the price of its product with every change in supply and demand c. Home Concepts, a furniture store, giving a discount on all its furniture to increase annual sales d. Quick Connect, a cable operator, changing the price of channels according to the demand of its customers