Briefly explain the benefits-received principle and why it does not work well for pubic goods. Give an example that is not in the text.
What will be an ideal response?
The benefits-received principle means that the individuals receiving the benefits are those who pay for them. Although this principle may work for some private goods, it does not work well for public goods such as national defense and the judicial system. For example, because we collectively consume the safety benefits of having a police force, it is not possible to find out who benefits and by exactly how much in order to tax them proportionally.
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Gas stations can price the products that they sell in their convenience store a little bit higher because
a. these products are usually complements to the gas sales and the demand for gas is inelastic b. these products are usually complements to the gas sales and the demand for gas is elastic c. these products are usually substitutes to the gas sales and the demand for gas is inelastic d. these products are usually substitutes to the gas sales and the demand for gas is elastic
The majority of economists believe that policies that reduce the saving rate will reduce long-run living standards
a. True b. False Indicate whether the statement is true or false
If the length of time workers are eligible to receive unemployment insurance payments doubles?, then the unemployment rate will
What will be an ideal response?
Use the following given market-for-money diagrams to answer the next question.
The asset demand for money is shown by
A. D1. B. D2. C. D3. D. S.