Alissa is studying for her principles of economics exam. She tells her study partner that "Only a very small number of people ever get to become astronauts and go into space. Therefore space exploration is not a public good." Do you agree? Explain.
What will be an ideal response?
Space exploration is a public good because it produces all sorts of scientific discoveries that everyone can share (such as Tang and Velcro) and adds to our understanding of the world in which we live. Therefore, it is nonrival in consumption. Since all people share in this benefit, it is also nonexcludable. Therefore, it is a public good.
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If you go to a bar tonight and have three beers before going home to study economics, will you likely receive some consumer’s surplus? Explain why or why not.
What will be an ideal response?
Upland has a population of 15,000, of whom 9,000 work 8 hours a day to produce real output of $342,000 . Lowland has a population of 8,000, of whom 7,000 work 7 hours a day to produce real output of $171,500
a. Upland has higher productivity and higher real GDP per person than Lowland. b. Upland has higher productivity but lower real GDP per person than Lowland. c. Upland has lower productivity but higher real GDP per person than Lowland. d. Upland has lower productivity and lower real GDP per person than Lowland.
Figure 7-12
Which of the graphs in Figure 7-12 shows a marginal physical product curve that exhibits first increasing, and then diminishing, marginal returns to sunlight?
a.
(a)
b.
(b)
c.
(c)
d.
(d)
Nancy returns to school to study medicine. After graduating during an economic boom, she spends six months looking for a job. During this period, she is considered
A. Structurally unemployed. B. Seasonally unemployed. C. Frictionally unemployed. D. Cyclically unemployed.