A Canada Day Fireworks Display

question 96

Multiple Choice

A Canada Day fireworks display

• A)does not have a free-rider problem.
• B)has a free-rider problem that cannot be eliminated.
• C)has a free-rider problem that can be eliminated by using taxes paid by area residents to finance the display.
• D)is a private good.
• E)is a natural monopoly good.

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Definitions:

Income Effect

The impact on an individual's or economy's purchasing power from an increase or decrease in income, which subsequently affects the quantity demanded for goods and services.

Substitution Effect

The change in consumption that occurs when a price change for one good causes a consumer to replace that good with a more or less expensive substitute.

Price Change

An alteration in the cost of goods or services in the market.

Income

The amount of money received by an individual or entity, usually in exchange for labor or services, or through returns on investments.