The above table shows the marginal benefit from submarines for the only two citizens of a country. Submarines are a public good. If submarines cost $175 a piece to produce, what is the efficient quantity of submarines?
A) 0
B) 1
C) 2
D) 3
C
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A rise in six-month LIBOR is good news to __________ in a swap contract
A) the fixed-rate payer B) the floating-rate payer C) both payers D) neither payer
A shift in the LM curve to the left could be caused by
a. an increase in the price level. b. a decrease in the money supply. c. an increase in the precautionary demand for money. d. all of the above. e. none of the above.
The effect of legislation establishing a minimum wage above the market clearing wage is
A) unemployment. B) a shortage of labor. C) higher wages for all workers. D) a shift of the demand for labor curve.
To close a recessionary gap through fiscal policy, the government should
A) decrease government spending in order to increase aggregate supply. B) increase government spending in order to increase aggregate demand. C) reduce taxes in order to stimulate investment, and thus increase aggregate supply. D) increase government spending and taxes in order to both increase aggregate demand and aggregate supply.