Jason and Mark Were Talking in Class, but So Was

question 47

Multiple Choice

Jason and Mark were talking in class, but so was everyone else. As they continued to discuss their day's adventures, it suddenly became clear to them that the teacher was staring at them. They didn't realize that the class had been called to order and what was once only one conversation among many was now disruptive. Jason apologized quickly, and the teacher resumed her normal activities. This is a good example of how a consumer's ability to detect a difference between two stimuli is ________.

• A) absolute
• B) negligible
• C) relative
• D) embedded

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Definitions:

Free-Rider Problem

A situation where some individuals consume more than their fair share of a public resource, or do not pay for their share, leading to underproduction or depletion of the resource.

Drop-In-The-Bucket Problem

A problem intrinsic to public goods: The good or service is usually so costly that its provision generally does not depend on whether any single person pays.

Public Goods

Goods or services that are non-excludable and non-rivalrous, meaning they are freely available to all and used by one person does not reduce availability to others.

Positive Externality

A benefit received by a third party resulting from an economic transaction in which they were not involved.