ECON 2010 FINAL

An individual is more likely to free ride when a good

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Unformatted text preview: C) Yes 4. An individual is more likely to free ride when a good is: A) artificially scarce. excludable and nonrival B) private. excludable and rival C) nonexcludable. D) nonrival. rival- more than one person cannot consume the good at the same time excludable- suppliers of the good can stop people who dont pay from using the good nonrival- more than one person can consume it nonexcludable- suppliers of the good cannot stop people who dont pay from using the good Version 1 Page 1 Use the following to answer question 5: Figure: Three Firms the tax is $400 the point where the MB line meets the tax line is how much the firm will produce! Firm C will not produce because they are under the tax line meaning it more expensive for firm to pollute and pay the tax than to not pollute. the marginal cost of production was at 0 (the x axis) and a tax is a parallel (vertical) increase at the amount of the tax 5. (Figure: Three Firms) Three firms in a small city are responsible for emitting pollution, and the marginal benefit of the individual polluters is shown in the f...
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This document was uploaded on 02/18/2014 for the course ECON 2010 at Colorado.

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