Public Opinion Polls Generally Indicate That Most Americans Support High

question 20

Multiple Choice

Public opinion polls generally indicate that most Americans support high levels of government services and benefits, though they are opposed to raising taxes to pay for them. This pair of stylized facts is most indicative of a/an ________.

• A) free-rider problem
• B) unstable coalition
• C) coordination problem
• D) prisoner's dilemma
• E) electoral college

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Definitions:

Substitutes

Goods or services that can be used in place of each other; when the price of one increases, the demand for the other is likely to increase.

Complements

Complements are goods or services that are used together, where the increase in the consumption of one leads to an increase in the consumption of the other.

Price Elasticity

An index indicating how the amount of a product demanded or supplied changes in response to a price variation.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a given price over a particular period of time.