Suppose a valley periodically floods. A dam can be built in the river that would prevent the flooding. Explain how flood control provided by building the dam arguably fits the characteristics of a public good
What will be an ideal response?
The dam would be indivisible since it must be a certain size in order to be effective. Once flood control is provided, new homes can be protected at no additional cost. Any one home's protection does not reduce the protection from flooding for any other home. It would be impossible to exclude someone from the benefits of the flood control, so flood control arguably is a public good.
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If an increase in the level of the money supply results in a proportionate increase in prices with no effect on any real variables, we say that
A) the Fisher relationship holds. B) money is neutral. C) money is superneutral. D) money is the most preferred store of value.
Nonlinear price discrimination is
A) perfect price discrimination. B) quantity price discrimination. C) group price discrimination. D) two-part pricing.
Incrementalism makes sense from a politician's perspective, because _____
a. it keeps all government employees happy b. it eliminates the cost of preparing a budget c. it maximizes political support by giving all special interests something d. they want to be seen in favor of bigger government
Which of the following is not used as a trade protection practice?
a. tariff b. quotas c. safety standards d. foreign-owned domestic production e. nontariff barriers