Explain why cable television is not a pure private good
What will be an ideal response?
Pure private goods are those that are excludable and which are rival in consumption. Cable television clearly is excludable because only those that pay may receive the service. However, it is not a good for which there is rivalry in consumption. That is one person's enjoyment of the cable television doesn't interfere with anyone else's enjoyment of it.
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Frictional unemployment may be economically beneficial if:
A. losses in economic output are small. B. its psychological costs are borne only by the unemployed worker. C. the social costs are limited to smaller tax revenues collected. D. it leads to a better match between worker and job.
All of these factors create economies of scale, except
a. Specialization and Division of Labor b. Technological Factors c. Increase in advertisement costs d. Quantity discounts
Excess reserves in a bank are the difference between required reserves and the bank's total net worth.
Answer the following statement true (T) or false (F)
Which of the following might be a method that the government could use to correct a negative externality?
A) an effluent fee on waste from the production of goods that create negative externalities B) government subsidies to producers of goods that create negative externalities C) financing additional production of goods that create negative externalities D) encouraging overallocation of resources of production of goods that create negative externalities