Suppose a valley periodically floods. A dam can be built in the river that would prevent the flooding. Explain how flood control provided by building the dam arguably fits the characteristics of a public good
What will be an ideal response?
The dam would be indivisible since it must be a certain size in order to be effective. Once flood control is provided, new homes can be protected at no additional cost. Any one home's protection does not reduce the protection from flooding for any other home. It would be impossible to exclude someone from the benefits of the flood control, so flood control arguably is a public good.
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Suppose the price of product X increases. We would expect this price increase to
A. decrease the demands for both complementary good Y and substitute product Z. B. increase the demand for complementary good Y and decrease the demand for substitute product Z. C. increase the demands for both complementary good Y and substitute product Z. D. decrease the demand for complementary good Y and increase the demand for substitute product Z.
The figure above shows the production possibilities frontiers for four nations that have identical production possibilities frontiers in the present. The one that will grow most rapidly in the future is most likely to be producing at point
A) A. B) B. C) C. D) D.
Refer to the information provided in Figure 3.4 below to answer the question(s) that follow.
Figure 3.4Refer to Figure 3.4. If consumer income increases, the demand for tuna fish sandwiches shifts from D0 to D1. This implies that tuna fish sandwiches are a(n)
A. normal good. B. complementary good. C. substitute good. D. inferior good.
A medical student is likely to consume more than a high school student because the
A. medical student's permanent income is likely higher than the high school student's permanent income. B. medical student bases consumption on current income while the high school student does not. C. medical student and the high school student both base consumption on current income. D. high school student bases consumption on permanent income while the medical student does not.