"When it comes to public goods, individuals do not reveal their true preferences because it is not in their self interest to do so." Evaluate this statement
What will be an ideal response?
The statement is true. For example, in the case of a private good such as a hamburger, a consumer either reveals her willingness to pay by purchasing the good at the market price or goes without it. This is not the case with a public good. Once produced, individuals cannot be excluded from consuming the good even if they have not paid for the good. Therefore, it is in a consumer's interest not to reveal her true preferences for the good.
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Monitoring
a. Gives the principle a better performance evaluation metric b. Allows the principle to better align the incentives of the agent with the goals of the principle c. Can be costly for the principal d. All of the above
What is true of depletable resources is that
a. increasing scarcity leads to their total disappearance. b. they are depleted by gradually using up the supply of homogeneous resources, every unit of which is equally available. c. generally the most accessible and cheapest sources are used up so that new supplies become more costly. d. their prices must rise at the average rate of inflation.