The free-rider problem plagues public goods because
A) public goods are not produced by profit-maximizing firms and hence can be produced only at a loss to society.
B) once public goods are produced it is not possible to exclude anyone from consuming these goods.
C) the government can refuse to serve a citizen.
D) the public doesn't care about public goods.
Answer: B
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If at the prevailing real wage rate, the quantity of labor supplied exceeds the quantity demanded
A) there is a shortage of labor. B) the real wage rate will rise to restore equilibrium. C) the real wage rate is greater than the equilibrium real wage rate. D) None of the above answers is correct.
If an individual is less careful about avoiding accidents or illness because she has health insurance, this is an example of:
A. the free-rider problem. B. the moral hazard problem. C. the adverse selection problem. D. the Coase theorem.