Alissa is studying for her principles of economics exam. She tells her study partner that "Only a very small number of people ever get to become astronauts and go into space. Therefore space exploration is not a public good." Do you agree? Explain.
What will be an ideal response?
Space exploration is a public good because it produces all sorts of scientific discoveries that everyone can share (such as Tang and Velcro) and adds to our understanding of the world in which we live. Therefore, it is nonrival in consumption. Since all people share in this benefit, it is also nonexcludable. Therefore, it is a public good.
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According to this Application, current spending on federal retirement and health programs accounts for 10 percent of GDP. Experts estimate that this spending component's share of GDP ________ by the year 2075
A) will more than double B) will remain constant C) will grow moderately initially then taper off D) is likely to shrink
The above figure shows the marginal social benefit, marginal private cost and marginal social cost of producing steel. There is a marginal external ________ of ________ per ton
A) benefit; $200 B) benefit; $100 C) cost; $200 D) cost; $100
What is the largest component of GPDI?
A) residential fixed investment B) nonresidential fixed investment C) inventory investment D) consumer durables
When the supplier of an artificially scarce good charges a price greater than zero, then the:
a. good becomes nonexcludable. b. supplier reduces producer surplus from what it would be if the price were zero. c. supplier reduces consumer surplus from what it would be if the price were zero. d. supplier gives rise to the free-rider problem.