“Since a public good is enjoyed by all members of society, willingness to pay for the good will not diminish as the amount produced increases.” Evaluate and use an example to support your answer
Please provide the best answer for the statement.
This statement is incorrect. Public goods face diminishing returns like any other good. Consider the number of highways in a town, for example. Citizens of a town are very willing to pay for the first highway, as it produces large gains to the town. Successive highways produce less and less willingness to pay because the citizens face lower and lower gains from the increased number of highways. In a town of, say 20,000, 15 highways would not produce much more benefit than just 2 or 3 highways.
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Which of the following is TRUE regarding real GDP?
I. Real GDP is the value of the total production of the country's farms, factories, shops, and offices. II. Real GDP rises whenever inflation occurs. III. Real GDP does not measure all that is produced. A) I and II B) I and III C) II and III D) I, II and III
The price elasticity of demand is measured by the
A) percentage change in quantity demanded divided by the percentage change in price. B) percentage change in price divided by the percentage change in quantity demanded. C) change in quantity demanded divided by the change in price. D) change in price divided by the change in quantity demanded.
Banks have more expertise than individual households in making loans because banks: a. lend smaller amounts of money
b. are regulated by the government. c. also pay interest to savers. d. are subject to severe penalties if they make bad loans. e. make many more loans than individual households do.
What is the percentage of income received by the middle three quintiles on line X?
