Because of the Free-Rider Problem

question 6

Multiple Choice

Because of the free-rider problem,

• A)private markets tend to undersupply public goods.
• B)the federal government spends too many resources on national defense and not enough resources on medical research.
• C)firework displays provided by private markets have become increasingly popular.
• D)poverty can easily be eliminated through private charity.

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Definitions:

Interaction Effects

The influence that the combination of two or more independent variables has on a dependent variable, beyond their individual effects.

Income

The money received, especially on a regular basis, for work or through investments.

Gender

Social and cultural distinctions associated with being male or female, as opposed to biological differences.

Main Effects

The individual impact of each independent variable on the dependent variable in an analysis.