A public good:
a. is rivalrous in consumption and excludable
b. in nonrivalrous in consumption and nonexcludable
c. must be produces by government
d. both b. and c.
Ans: d. both b. and c.
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The figure above shows the market for transportation services, which produces an external cost due to the air pollution that is created. Suppose that the government decides to introduce a pollution tax
What is the tax per vehicle mile that will achieve the efficient outcome? A) $2 B) $4 C) $6 D) $8
Refer to Figure 9.3. If the government establishes a price ceiling of $1.00, the resulting deadweight loss will be
A) $1.50. B) $200. C) $150. D) $300. E) $600.
What happens to the price of the product and total revenue for a perfectly competitive firm if it doubles the amount of output it supplies in the market?
Refer to the diagram, where T is tax revenues and G is government expenditures. All figures are in billions of dollars. If the full-employment GDP and actual GDP are each $400 billion, this economy will realize a:
A. cyclically adjusted deficit of $20 billion.
B. cyclical deficit of $20 billion.
C. cyclical surplus of $20 billion.
D. cyclically adjusted deficit of zero.