If the consumption of a good by one person reduces the amount of it that can be consumed by others, the good is
A. excludable.
B. nonexcludable.
C. rivalrous in consumption.
D. nonrivalrous in consumption.
Answer: C
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The profit maximizing rule MR = MC applies to:
A. imperfectly competitive firms only. B. monopolists only. C. all firms. D. perfectly competitive firms only.
Refer to the above figure. Suppose that the economy starts at AD1. If the government reduces taxes, then the economy goes to AD2, but then falls back to AD3. This is an example of
A) complete crowding-out effect. B) partial crowding-out effect. C) Ricardian equivalence. D) laissez-faire.
Refer to Table 4-3. The table above lists the marginal cost of polo shirts by Marko's, a firm that specializes in producing men's clothing. If the market price of Marko's polo shirts is $30, producer surplus is
A) $0. B) $16. C) $52. D) $68.
If prices are rising on average, then
A) real GDP will be less than nominal GDP in the years before the base year. B) real GDP will be greater than nominal GDP in the years after the base year. C) real GDP will always be equal to nominal GDP. D) real GDP will be greater than nominal GDP in the years before the base year.