On the Fourth of July, There Is No Fireworks Display

question 28

Multiple Choice

On the Fourth of July, there is no fireworks display in the small town of Yankeeville, even though it would be efficient for such a display to be produced. Which of the following statements is correct?

• A)The lack of a fireworks display in Yankeeville arises because of an externality.
• B)The lack of a fireworks display in Yankeeville arises because the free-rider problem does not apply to goods such as fireworks displays.
• C)In deciding not to produce a fireworks display in Yankeeville, private individuals and private firms made decisions that were privately irrational.
• D)All of the above are correct.

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Definitions:

Workplace Colleague

An individual with whom one shares a work environment, often collaborating on projects or sharing tasks.

Grocery Store

A retail store that sells food and other household goods.

Retrieval Cues

Stimuli or signals that can trigger the recall of information from memory.

Memories

Information or experiences stored in the brain that can be recalled or accessed at a later time.