User Fees May Reduce the Net Benefits That Users Derive

question 19

Multiple Choice

User fees may reduce the net benefits that users derive from new infrastructure in two ways ________ and _____________.

• A) By reducing purchasing power; by motivating them to cut back on use
• B) By increasing the quality of the service; by decreasing the length of time the service will be available
• C) By decreasing the quality of service; by increasing the quantity of services
• D) By removing positive externalities; by eliminating the free rider problem

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Definitions:

Economic History

The study of economies or economic phenomena in the past.

Aggregate Price Level

A measure of the overall level of prices of goods and services in an economy over a specified period, often used as an indicator of inflation.

Macroeconomics

The branch of economics that studies the behavior and performance of an economy as a whole, focusing on aggregate phenomena such as GDP, unemployment rates, and inflation.

Positive Question

A question concerning the way the world actually is (fact-based) rather than how it should be (value-based).