Corn flakes are
A) a rival good because many firms produce them.
B) a rival good because if another person wants some corn flakes society has to use additional resources to produce corn flakes for that person.
C) a non-rival good because there are only a few firms in the industry.
D) a non-rival good because even if another person wants some corn flakes so many corn flakes are produced that no additional resources are used to satisfy this new customer's needs.
E) a public good.
B
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Suppose you and I are identical. We put up fireworks in our adjacent backyards on a national holiday, and we can both enjoy each other's fireworks. a. Can you identify an externality? b. Can you identify any missing markets? c. Do you think we will provide more or less than the efficient number of fireworks? d. If we could vote on a tax to be imposed on us fund fireworks in our back yards, would we vote for a lump sum tax (imposed equally on both of us) that will cause more fireworks to be put up than what we would put up on our own? e. Suppose instead the government implements a Pigouvian subsidy. How would the number of fireworks compare to what would happen in (d)? How much of a subsidy would you think we would both get for every dollar of fireworks each of us individually buys?
What will be an ideal response?
Refer to Table 9-10. Fill in the following table with the opportunity costs of producing bows and arrows for Tran and Farah
Pens Pencils Tran Farah
When government purchases increase, the spending multiplier indicates the _____
a. amount of movement along the aggregate demand curve b. amount of movement along the aggregate supply curve c. size of the rightward shift of the aggregate demand curve at a given price level d. size of the rightward shift of the aggregate supply curve at a given price level e. size of the expansionary gap
Which of the following does not explain why data on income distribution and the poverty rate give an incomplete picture of inequality?
a. in-kind transfers b. economic life cycle c. transitory income d. All of the above contribute to an incomplete picture of inequality.