It is commonly argued that national defense is a public good. Nevertheless, the weapons used by the U.S. military are produced by private firms. We can conclude that
a. resources would be used more efficiently if the government produced the weapons.
b. resources would be used more efficiently if private firms provided national defense.
c. weapons are rival in consumption and excludable, but national defense is not rival in consumption and not excludable.
d. national defense is rival in consumption and excludable, but weapons are not rival in consumption and not excludable.
c
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Examples of comparative advantage show how trade between two countries can make each better off. Compared to their pre-trade positions, trade makes both countries better off because in each country
A) total employment is greater. B) total welfare is greater. C) total consumption of goods is greater. D) wages are higher.
A perfectly competitive firm has to charge the same price as every other firm in the market. Therefore, the firm
A) faces a perfectly elastic supply curve. B) is not able to make a profit in the short run. C) faces a perfectly inelastic demand curve. D) is a price taker.
Evidence suggests that population growth has negative effects on
(a) economic growth. (b) poverty reduction. (c) environment. (d) education. (e) all of the above.
The Coinage Act of 1792 set the relative values of silver and gold coins at 15 to 1 . Suppose the relative values of silver and gold in the market was 14 to 1 . In this case,
a. only silver would circulate as money. b. silver would be hoarded and sold abroad. c. silver would be overvalued at the mint. d. both gold and silver would circulate as money.