When a good is not excludable but is rival in consumption the:
A. good is likely a private good.
B. free rider problem may arise.
C. good is likely a common resource.
D. tragedy of the commons may arise.
Answer: D
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Which of the following is an example of an economic trade-off that a firm has to make?
A) deciding what profit margin it desires for its products B) whether or not consumers will buy its products C) whether it is cheaper to produce with more machines or with more workers D) deciding why consumers want its products
The long-run capacity decision depends on the ________ period marginal revenue and the ________ marginal cost.
A) off-peak; short-run B) off-peak; long-run C) peak-; short-run D) peak-; long-run
If a fiscal policy change is going to exert a stabilizing impact on the economy, it must
a. add demand stimulus during a slowdown but restraint during an economic boom. b. exert an expansionary impact during all phases of the business cycle. c. restrain aggregate demand during all phases of the business cycle. d. keep the government's budget in balance.
A small country is considering imposing a tariff on imported wine at the rate of $5 per bottle. Economists have estimated the following based on this tariff amount: World price of wine (free trade):$20 per bottleDomestic production (free trade):500,000 bottlesDomestic production (after tariff):600,000 bottlesDomestic consumption (free trade):750,000 bottlesDomestic consumption (after tariff):650,000 bottles The production effect of the tariff on wine is worth about
A. $250,000. B. $2.75 million. C. $500,000. D. $2.5 million.