32) The free-rider problem occurs for A) private goods and public goods. B) private goods but not public goods. C) public goods but not private goods. D) neither public nor private goods. 33) The free-rider problem arises because A) once provided a public good is available to all regardless of whether they paid for it. B) poor people cannot afford to contribute to public goods. C) enforcement of tax laws is inadequate. D) people disagree with how the government spends it s money. 34) Suppose 100 townspeople value a statue of the local hero at $1 each and construction of the statue would cost $90. Which of the following is true: A) It would be efficient to build the statue but it may not be built because some of the townspeople who value the statue will not contribute to its construction. B) It would be efficient to build the statue and it will be built because at least ninety of the townspeople will contribute to its construction. C) the statue will not be built because it is not efficient to build a statue that costs $90 if the townspeople value it at only $1. D) the statue will not be built because the local government does not have the power to tax only those who value it. 35) When the government provides a public good by taxing citizens and using tax money to provide the good A) the result is efficient if the total value of the public good is greater than the cost of providing it. B) the result is inefficient because the government is an inefficient provider of goods and services. C) the result is inefficient because if it were efficient the good would have been provided in a free market. D) the result is efficient only if voters specifically agreed to provision of that good. 36) During pledge week your local public television station asks viewers to contribute to the station. People who watch public television but do NOT contribute are A) free-riding. B) engaged in moral hazard. C) those who do not value public television. D) causing adverse selection. 37) Which of the following is likely to overcome the free-rider problem? A) offer people a private gift for contributing B) arrange for matching contributions C) appeal to peoples’ sense of civic or moral responsibility D) all of the above 38) Which of the following is least likely to overcome the free-rider problem? A) offer people a private gift for contributing B) arrange for matching contributions C) appeal to peoples’ sense of civic or moral responsibility D) maintain anonymity of contributions 39) An appeal to peoples’ sense of civic or moral responsibility will ________ the free-rider problem and lead to a ________ level of contribution to the public good. A) increase; smaller B) increase; larger C) reduce; smaller D) reduce; larger 40) Offering contributors private goods such as coffee mugs books or magazine subscriptions will ________ the free-rider problem and lead to a ________ level of contribution to the public good. A) reduce; smaller B) reduce; larger C) increase; smaller D) increase; larger 41) Arranging matching charitable contributions will ________ the free-rider problem and lead to a ________ level of contribution to the public good. A) increase; smaller B) increase; larger C) reduce; smaller D) reduce; larger
