Classify the following goods as private goods, common pool resources, club goods, or public goods
a. Health insurance
b. Radio spectrum
c. A video on YouTube
d. A mosquito control program in a city
e. A library's collection of e-books
a. Health insurance is a private good. It is non-rival in that it can be consumed only by one person. It is excludable in the sense that people can be prevented from using it if they don't pay for it.
b. Radio spectrum is considered a common pool resource. People cannot be prevented from accessing the radio spectrum and so it is nonexcludable. When too many users access radio the spectrum, this causes congestion, which reduces benefits for everyone. It is therefore rival in consumption.
c. A video on YouTube has the properties of a public good. Once it has been uploaded, any number of users can view the video without affecting others' consumption (and is therefore nonrival in consumption). The person who uploads the video cannot selectively deny access to certain people (it is nonexcludable).
d. A mosquito control program in a city is a public good. The residents of the city consume this service simultaneously (it is nonrival) and no one can be excluded from the benefits of the program (it is nonexcludable).
e. E-books are club goods. They are non-rival (my reading the book does not preclude your reading the book at the same time). The library could exclude people from reading the book by limiting the number of people who can "borrow" an e-book at any one time.
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Suppose you have $400 to invest at a nominal interest rate of 7 percent, and the investment's term to maturity is 1 year. If the inflation rate is 2 percent, then the real return on your investment is approximately
A) $8. B) $20. C) $28. D) $36.
In 2008, Australia had a government budget surplus of $21.7 billion. This budget surplus shifts the demand for loanable funds curve ________
A) leftward and lowers the real interest rate. B) leftward and creates a crowding-out effect. C) rightward and creates a crowding-out effect. D) rightward and creates a Ricardo-Barro effect.
If exports and imports both fell, but exports fell less than imports, a. AD would decrease
b. AD would increase. c. AD would be unaffected. d. AD could either increase or decrease.
Which of the following is an example of structural unemployment?
A. Alan, a software engineer, lost his job when the internet startup he worked for went bankrupt. He interviewed with five companies in the area before taking a job with another firm in the industry. B. Dora lost her job when the textile factory closed. She does not have skills to work in another industry and has been unemployed for over a year. C. Marsha was laid off from her job with the airline because the recession has reduced the demand for airline travel. She expects to get her job back when the economy picks up. D. Jim had a job as an engineer, but quit when his wife was transferred to another state. He looked for a month before finding a new job that he liked.