The principal feature of private goods is that
A) they cannot be rented or purchased.
B) consumption by one person reduces the quantity available to others.
C) no one can be excluded from consumption of the product.
D) externality problems associated with their production are always negative.
Answer: B
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When goods are subject to market failure, all of the following are possible solutions to the market failure except:
A. privatize the good. B. have government either regulate the market or provide the good. C. set a very specific consumer quota on consumption. D. change social norms.
According to the quantity equation, if M increases by 3 per cent and V increases by 2 per cent, then:
A. real income increases by approximately 5 per cent. B. the price level increases by approximately 5 per cent. C. the nominal interest rate increases by approximately 5 per cent. D. nominal income increases by approximately 5 per cent.
Along a linear downward-sloping demand curve, the price elasticity of demand will be:
A. equal to zero across each price range. B. less than one across each price range. C. different across each price range. D. greater than one across each price range.
It is impossible to find a direct relationship between unemployment and social problems such as illness, crime, and divorce.
Answer the following statement true (T) or false (F)