People Have Little Incentive to Produce a Public Good Because

question 33

Multiple Choice

People have little incentive to produce a public good because

• A) the social benefit is less than the private benefit.
• B) the social benefit is less than the social cost.
• C) there is a free-rider problem.
• D) there is a Tragedy of the Commons.

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Definitions:

Price

The amount of money expected, required, or given in payment for something.

Reference Value

The benchmark or standard against which the performance or value of a product or service is compared.

Extra Value Meal

A marketing offer by fast-food restaurants where a combination of items is sold together at a reduced price, compared to buying each item separately.

Profit Equation

Profit = Total revenue − Total cost; or Profit = (Unit price × Quantity sold) − (Fixed cost + Variable cost).