Pleasure boaters enjoy the use of waterways, but sometimes run into problems and need rescue. Coast Guard boats, supported by tax revenue, are often used for rescue. Is it likely that there will be an efficient amount of boating and rescuing?
No. The full cost of boating includes the cost of rescue, based upon the amount of rescue that a typical boat ride requires. Rescue is supported by general tax revenue, not a charge on boats or other charges directly paid by the boaters. The social cost of the boat trips is below the private cost, resulting in too many boat outings. An appropriate response is to charge boaters a fee, based on usage that covers the cost of providing rescue services.
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The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
When the production possibilities frontier is bowed outwards, the opportunity cost of producing more of one good
A) increases in terms of the amount foregone of the other good. B) decreases in terms of the amount foregone of the other good. C) remains constant. D) cannot be determined.
Judging from the table, which of the following groups is the largest?
a. discouraged workers
b. persons unemployed 15 weeks or longer
c. marginally attached workers
d. persons employed part time for economic reasons
The H1-B provision of immigration law:
A. allows 65,000 high-skilled workers in specialty occupations to enter and work in the United States for six years. B. raised U.S. annual immigration quotas from 500,000 to 700,000. C. established a lottery for the admission of diversity immigrants into the United States. D. provided amnesty to over one million illegal immigrants in 1989-1991, allowing them to become legal citizens of the United States.