Free riders are not a problem in the market for a private good because
A) non-payers can be excluded from consuming the good.
B) the good is a rival good.
C) the good can be produced only at a positive marginal cost.
D) the free rider will not get caught.
Ques. 2In the above figure, what is the amount of consumer surplus at the efficient quantity?
A) 0
B) 1,000
C) 2,000
D) 4,000
Ques. 3Generating electricity creates air pollution. This industry, if left unregulated, will produce at an inefficient market equilibrium where
A) marginal private cost equals marginal social benefit.
B) marginal social cost equals marginal social benefit.
C) marginal social cost equals marginal private cost.
D) marginal social benefit is greater than marginal social cost.
Ques. 4The above table has the total product schedule for Joe's Barber Shop. Joe charges 6 per haircut. If the wage rate falls from 24 per worker to 12 per worker, the quantity of labor hired ________ and the new number of workers employed is ________.
A) increases; 2
B) decreases; 2
C) increases; 5
D) increase; 3
Ques. 5A monopolistically competitive firm will always choose to produce where
A) marginal revenue equals marginal cost.
B) marginal cost meets the demand curve.
C) average total cost meets the demand curve.
D) average total cost is minimized.
Ques. 6In the scenario above, which of the following actions will maximize the industry's economic profit?
A) Both firms comply with the agreement.
B) Both firms cheat on the agreement, producing more than the agreed amount.
C) One of the firms complies with the agreement while the other firm cheats, producing more than the agreed amount.
D) Because the firms are colluding, the profit does not change regardless of whether the firms comply with agreement or cheat on the agreement.
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