When People Try to Benefit from a Public Good Without

question 253

Multiple Choice

When people try to benefit from a public good without paying for it we call it the

• A) free-rider problem.
• B) duopolists' dilemma.
• C) public goods problem.
• D) taxation problem.

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Definitions:

Isoquant

A curve that represents all the combinations of inputs that result in the production of a certain level of output, suggesting input substitutability in the production process.

Capital

Financial assets or the financial value of assets, such as cash and goods, used by a business to produce goods and services and create wealth.

Labor

The use of human labor, be it physical or intellectual, in generating goods and services.

MRTS

Marginal Rate of Technical Substitution. It's the rate at which one input can be reduced for every increase in another input, keeping output constant.