You are studying with a friend and your friend says, "Private goods are excludable and nonrival, while public goods are nonexcludable and rival." Do you agree?
What will be an ideal response?
No, private goods are excludable and rival, while public goods are nonexcludable and nonrival. Contrary to what your friend asserted, it is common resources rather than public goods that are nonexcludable and rival.
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Alexis de Tocqueville observed in his Democracy in America: "There is no country in which everything can be provided for by the laws, or in which political institutions can prove a substitute for
A) common sense and morality."
B) economic development."
C) police and prisons."
D) supply and demand."
E) the private pursuit of private interests."
Suppose a Middle Eastern firm moves its final assembly line to Germany and then ships the final products to other members of the EU trading bloc. This is an example of
A) trade diversion. B) trade deflection. C) trade restriction. D) trade detection.
Scarcity means
A) wants are greater than the limited resources available to satisfy these wants. B) wants are less than the limited resources available to satisfy these wants. C) resources are infinite. D) wants are limited. E) both c and d
Explain the concept of efficiency as it relates to taxation.
What will be an ideal response?