How does the federal government provide public goods and reduce the number of free riders?
a. Requiring tax payments
b. Acquiring private firms
c. Investing in education
d. Protecting patents
a. Requiring tax payments
The government collects taxes to provide public goods and reduce free riders.
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All of the following are devices that governments can use to achieve a more efficient allocation of resources in the presence of external benefits EXCEPT
A) vouchers. B) private subsidies. C) marketable permits. D) public provision.
If the consumer sentiment index turns down sharply over a period of several months, which of the following is most likely to occur in the near future?
a. an increase in aggregate demand and expansion in real output b. a reduction in aggregate demand and a contraction in real output c. a reduction in aggregate demand and expansion in real output d. an increase in aggregate demand and a contraction in real output
In a perfectly competitive labor market, if the value of marginal product of the last worker hired is $20 and the wage rate is $25, then the firm should:
A. hire fewer workers. B. either hire more or fewer workers, depending on the price of the firm's output. C. not change the number of workers it hires. D. hire more workers.
Currently, a monopolist's MR = $5 and its MC = $10 and it serves 10 consumers. An 11th consumer walks in. Should the company provide service to the additional customer?
A. Yes, MC is equal to the number of customers, so it should provide service to the additional customer. B. No, MR < MC, so it should not provide service to the additional customer. C. No, MR is less than the number of customers, so it should not provide service to the additional customer. D. Yes, MR < MC, so it should provide service to the additional customer.