A textbook is a
a. private good and the knowledge that one gains from reading the book is a common resource.
b. private good and the knowledge that one gains from reading the book is a public good.
c. common resource and the knowledge that one gains from reading the book is a public good.
d. common resource and the knowledge that one gains from reading the book is a private good.
b
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The government borrows money to cover budget deficits by
A) purchasing bonds. B) petitioning the International Monetary Fund. C) selling bonds. D) filling out a loan application at Citibank.
A product is considered to be nonexcludable if
A) you cannot keep those who did not pay for the item from enjoying its benefits. B) it is jointly owned by all members of a community. C) your consumption of the product reduces the quantity available for others to consume. D) you can keep those who did not pay for the item from enjoying its benefits.
The Taylor rule predicted a federal funds rate which was ________ that set when Paul Volcker was chairman of the Fed, and a rate which was ________ that set when Arthur Burns chaired the Fed
A) less than; equal to B) greater than; less than C) greater than; equal to D) less than; greater than
Marissa owns a small cottage by the lake. Big Boy’s Sawmill is next door, and it dumps sawdust into a sinkhole it owns. Unfortunately for Marissa, the sinkhole opens into a brook on her land, which gets clogged by the sawdust. It costs Marissa $3,000 per year to clean up the sawdust. Big Boy’s can dispose of the sawdust by having it hauled away for $2,000 per year. Marissa offers to pay Big Boy’s $2,500 per year to have the sawdust hauled away. In this example of the Coase theorem, what is the negative externality?
a. the cabin b. the sawdust c. the lake d. the sinkhole