When energy companies wish to raise the rates they charge to their customers, they must first argue their case at a public hearing before a regulatory body. How does the free rider problem explain why energy companies are usually successful in getting permission to raise their rates?
Answer to relevant QuestionsFiglio (1999) found that legislators are more likely to mirror their constituents’ preferences during election years than in earlier years of their terms. This is particularly true for relatively inexperienced legislators. ...Voters rarely get to choose the exact level of spending on a public good. Instead, they are provided with two options—a proposed spending level posed by the government and a default (or “reversion”) level that would be ...Describe the externalities argument for distributing money from one community to another. Provide an example of this kind of redistribution based on externalities. There are two types of residents in Brookline and Boston, professors and students. Professors have an income of Y = 200; students have an income of Y = 100. Both Brookline and Boston provide road repair services for their ...Seven in ten students who attend publicly funded universities leave the state after graduation, indicating that a very large fraction of states’ investments in human capital bears fruit elsewhere. Why, then, might states ...
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