Public goods face the
A. law of overproduction.
B. free-rider problem.
C. principle of rival consumption.
D. exclusion principle.
Answer: B
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If the government eliminates a tax on a good with a perfectly elastic supply, who benefits most?
A) buyers B) sellers C) buyers if the demand is also perfectly elastic, otherwise sellers D) buyers if the demand is unit elastic, otherwise sellers E) Buyers and sellers benefit equally.
On most days the price of a rose is $1 and 80 roses are purchased. On Valentine's Day the demand increases so that the price of a rose rises to $2 and 320 roses are purchased. Therefore, the price elasticity of
A) demand for roses is about 1.8. B) demand for roses is about 0.55. C) supply of roses is about 1.8. D) supply of roses is about 0.55.
What is the diamond-water paradox?
What will be an ideal response?
Most recessions in the United States since World War II have begun with
A) a decline in residential construction. B) a rapid increase in the price level. C) a stock market crash. D) a substantial number of bank failures.