In what sense is it meaningful to say that fighting poverty is a public good?
The argument that fighting poverty is a public good rests on the idea that, even if everyone prefers living in a society without poverty, fighting poverty is not a "good" that private actions will adequately provide. In the fight against poverty, people tend to free ride on the generosity of others.
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In addition to government purchases or changes in taxes, demand shocks in the economy can increase or decrease GDP, leading to a fall or rise in the trade balance. Which of the following would NOT represent a demand shock?
a. a change in household wealth leading to a rise in consumption expenditures. b. a rise in inflation. c. a change in the marginal propensity to import, causing imports to rise. d. an increase in technology, causing investment spending to rise.
Exhibit 8-8 Consumption function
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In Exhibit 8-8, which of the following could cause the movement from C1 to C2?
A. a decrease in real asset holdings B. lower interest rates C. expectations that the economy will grow D. expectations of lower future prices
A wheat farmer sells wheat in a perfectly competitive market and hires labor in a perfectly competitive market. The market price of wheat is $2 a bushel, the wage rate is $10, and the farmer employs five workers. If the farmer is maximizing his profits, then the marginal product of the fifth worker is
A. 0.2 bushels. B. 5 bushels. C. 20 bushels. D. indeterminate from the given information
A union representing a group of workers will tend to be stronger when
a. there are no good substitutes for the labor services of the unionized workers. b. the domestic producers of the good produced by the unionized workers face intense competition from foreign suppliers of the good. c. the cost of employing the unionized workers is a large part of the total cost of the product that they produce. d. the demand for the good produced by the unionized workers is highly elastic.