A distinguishing feature of a public good is that it:
A. is not possible to exclude people who don't pay for the public good.
B. is possible to exclude people who pay for the public good.
C. may have external costs.
D. is provided by the government.
Answer: A
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Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit. Assume that labor is the only input. If the last worker hired increases output by three units per hour, then to maximize profits the firm should
A) hire additional workers. B) not change the number of workers it currently hires. C) lay off some of its workers. D) There is not enough information to answer the question.
Which of the following statements is correct?
A) Federal Reserve district banks are owned by the government. B) Member banks receive no return on the stock they own in Federal district banks. C) Federal Reserve district banks pay dividends on their earnings to member banks. D) The boards of directors of the district banks are all local bankers.
The determination of which goods are public goods depends on: a. public laws
b. normative considerations. c. whether it is produced directly by the government or produced by a private sector firm. d. whether it is possible to exclude additional users from consuming the good if they do not pay for it.
Externalities consist of ____________________.
A. Only external costs B. Only external benefits C. Both external costs and external benefits D. None of these answers are correct.