a - Show and explain how and why an individual who cannot affect market prices should always behave 'truthfully'.

b - Explain fully (in the context of some appropriate specific numerical example that clearly specifies relevant costs and benefits) how and why free riding may prevent the voluntary provision of a public good in spite of the fact that such a provision could benefit all individuals.

Answer rating: 100% (QA)

This is true because if a person cannot affect the price they should act at their true optimum on the true indifference curveBy misrepresenting their preferences they can only move along the budget li... View the full answer