Consider a large public university in which a chemistry lecture is usually attended by 300 students or so but with large amounts of available seats on any given day

Is this a pure public good? If not, why not? Is this good likely to be provided in an efficient manner if the professor is vigilant in making sure that only registered students attend? Explain.


This is not a pure public good. For that to be true there would have to be both non-excludability and non-rivalry in consumption. The latter holds true in that one additional student in attendance is not likely to interfere with anyone else's enjoyment of the lecture. However, since the professor is able to exclude students who are not registered the former does not hold true. The fact that he actively practices this policy is likely to result in an inefficient outcome. Why? Additional students could enjoy the lecture without any cost imposed on anyone else. That is, the marginal cost of an additional student in attendance is likely to be zero but the benefits that he or she is likely to enjoy are positive.

Economics

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The opportunity cost of going to college consists of more than just the tuition that will be paid

a. True b. False

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Which of the following would result in a decrease in aggregate demand?

a. A higher domestic price level b. Higher raw materials prices c. Higher rates of tax d. Technological advances e. Expansionary government policy

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A combination of an increase in the discount rate and an open market sale of government securities by the Fed would: a. increase the money supply

b. decrease the money supply. c. leave the money supply unchanged. d. have an indeterminate effect on the money supply.

Economics

Bob values the utility of a single scoop of Baskin-Robbins ice cream at $1.50 . A double scoop gives total utility of $2.25, while a triple scoop yields $2.60 . Baskin-Robbins charges $1.35 for a single, $1.95 for a double, and $2.35 for a triple. How many scoops will Bob buy?

Economics