The table below shows the marginal benefit and marginal cost of purchasing an additional unit of 3 different public goods. Marginal benefitMarginal costTotal spending on the public goodPublic good 1$20$20$1,500Public good 2$15$25$800Public good 3$10$5$700 The government is spending the socially optimal amount on:
A. public good 3.
B. public good 1.
C. public good 2.
D. public good 1 and public good 2.
Answer: B
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The average number of years of schooling of workers in Argonia has increased. Which of the following is likely to be true if all other variables remain unchanged?
A) The unemployment rate in Argonia is likely to increase. B) The income per worker in Argonia is likely to decrease. C) The efficiency units of labor in Argonia is likely to increase. D) The aggregate price level in Argonia is likely to decrease.
An individual's need for liquidity would increase if
A) the average value of transactions carried out by the individual fell. B) the average value of transactions carried out by the individual rose. C) the individual got a raise. D) the individual received a new ATM card. E) the individual wanted to avoid risks.
A "satisficer" is a person who
a. always chooses the best course of action. b. often chooses the worst course of action. c. makes decisions that are merely good enough. d. studies both economics and psychology.
One of the factors that causes differences in inequality across countries is:
A. how many income earners there are relative to total population. B. the extent to which governments redistribute income through the public budget. C. the amount of jobs that are available in the country. D. the labor force participation rate within countries.