Which Type of Organization Would Find It Easiest to Overcome

question 22

Multiple Choice

Which type of organization would find it easiest to overcome the free rider problem?

• A) an environmental organization working to pass climate change legislation
• B) a labor union in a state where union membership is optional
• C) a trade association representing a small number of firms
• D) a national organization fighting for women's rights

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Definitions:

Updating Beliefs

The process of adjusting one's expectations or predictions based on new evidence or information.

Conservatism

In accounting, it is the principle of recognizing expenses and liabilities as soon as possible when there is uncertainty about the outcome, but only recognizing revenues when they are assured of being received.

Put-call Ratio

A metric used to measure market sentiment by dividing the number of traded put options by the number of traded call options.

Breadth

The extent to which movements in the broad market index are reflected widely in movements of individual stock prices.