Public goods are characterized by:
a. rivalry in consumption
b. nonrivalry in consumption.
c. excludability of nonpayers.
d. none of the above
b
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Assume a firm is currently employing 20 units of capital and 100 units of labor in its production process
Assume also that the marginal product of the 20th unit of capital is 40 units of output, the marginal product of the 100th unit of labor is 10 units of output and the per unit prices of capital and labor are $20 and $10, respectively. In this case, in order to minimize its costs of production the firm should: A) hire more capital and less labor. B) hire more labor and less capital. C) hire less capital and less labor. D) hire more capital and more labor.
Nominal gross domestic product is based on:
a. the existing prices at which final goods and services are actually sold. b. prices of final goods and services adjusted for inflation. c. prices at which intermediate goods are sold. d. none of these.
Other things equal, an increase in government purchases combined with an equal increase in taxes would: a. increase AD
b. decrease AD dramatically. c. decrease AD slightly. d. leave AD unchanged.
Suppose that firms in the chemical industry are allowed, free of charge, to dump harmful products into rivers. If this is the case in a competitive market, how will the price and output of the chemical products compare with their values under conditions of ideal economic efficiency?
a. Price is too low; output is too large. b. Price is too high; output is too large. c. Price is too low; output is too small. d. Price is too high; output is too small.