How is the market demand curve for a public good derived?
What will be an ideal response?
The market demand for public goods is arrived at by the vertical sum of the demand curves of consumers. Adding the individual demand curves vertically gives us a measure of the amount of money consumers are willing to pay for each level of the public good.
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If the production possibilities frontier for two goods is shown as a straight line, this implies that
A. there is no trade-off between the two goods. B. the principle of increasing costs is present. C. the slope of the production possibilities frontier is increasing. D. there are no specialized resources used in the production of these goods.
In the above figure, if the firm increases its output from Q1 to Q2, it will
A) reduce its marginal revenue. B) increase its marginal revenue. C) decrease its profit. D) increase its profit.
An oligopolist differs from a perfect competitor in that
A) the market demand curve for a perfectly competitive industry is perfectly elastic but it is downward-sloping in an oligopolistic industry. B) there is cutthroat competition in perfect competition but little competition in oligopoly because firms have significant market power. C) there are no entry barriers in perfect competition but there are entry barriers in oligopoly. D) firms in an oligopoly do not produce homogeneous products while firms in perfect competition do.
If in September 2014, €1 = $1.2962, a good costing €45 would have a Dollar price of:
(a) $59.52. (b) $58.33. (c) $34.72. (d) $35.72.