Related to the Economics in Practice on p. 83: The true cost of the Shakespeare in the Park tickets is
A. the additional cost to the city of extra security.
B. $0 plus the opportunity cost of the time spent in line.
C. the cost to put on the performance.
D. zero.
Answer: B
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The nominal rate of interest is
When a deadweight loss occurs in a market, we can be certain that
A) taxes have been imposed in a market. B) the market is a monopoly. C) there underproduction in the market. D) the entire society experiences a loss.
The government sometimes provides public goods because
a. private markets would not produce any of the goods. b. private markets would not produce the efficient quantity of the goods. c. private markets would charge too high a price for the goods. d. the government produces public goods more efficiently than private markets can.
An economics professor, upset about the rising cost of textbooks, proposed that his department purchase 50 copies of a statistics book so the students in the statistics class would not have to purchase their own books but rather could borrow a book for the semester and then return it for the next class to use. Which of the following strategies would not prevent a common resource problem with the
textbooks? a. Students will be required to pay a deposit for the textbook, which is refundable at the end of the semester when the book is returned in good condition. b. The textbooks are placed in a common area of the department so students can borrow and return them as needed. c. Students must sign a form agreeing to return the book or pay a fine equal to the replacement cost of the book. d. The textbooks are placed in the professor's office and will only be given to students who are registered members of the class. These students will not receive their final course grades until the books are returned.