The free-rider problem plagues public goods because
A. once public goods are produced it is not possible to exclude anyone from consuming these goods.
B. the government can refuse to serve a citizen.
C. public goods are not produced by profit-maximizing firms and hence can be produced only at a loss to society.
D. the public doesn't care about public goods.
Answer: A
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The purchase by a foreign government of an airplane produced in the United States is included in U.S
A) government purchases. B) investment expenditures. C) consumption expenditures. D) net exports.
Suppose that elementary education creates a positive externality. If the government subsidizes education by an amount equal to the per-unit externality it creates, then
a. the equilibrium quantity of education will equal the socially optimal quantity of education. b. the equilibrium quantity of education will be greater than the socially optimal quantity of education. c. the equilibrium quantity of education will be less than the socially optimal quantity of education. d. There is not enough information to answer the question.
Costume jewelry is produced in a monopolistically competitive market. One producer finds that MR = MC = $3 when output is 700 necklaces. An economist studying this information can conclude that:
A. the producer is charging a price of $3. B. economic profit is $2,100. C. the producer charges a price greater than $3. D. new firms will want to enter.
At a 3.5 percent annual growth rate it would take 20 years for GDP per capita to double.
Answer the following statement true (T) or false (F)