Why don't competitive markets do a good job providing public goods?
a. Because people do not receive benefits from public goods.
b. Because it is difficult to exclude people from gaining benefits from public goods without paying for them, and so market demand does not reflect the benefits to society from the public good.
c. Because public goods generate negative externalities, and pollution taxes reduce the incentive for firms to supply public goods.
d. Because firms cannot produce enough to satisfy market demand.
b
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The M2 measure of money consists of the sum of:
A. currency, checking and savings deposits. B. M1, savings deposits, small time deposits, and money market mutual funds. C. savings deposits, small time deposits, and money market mutual funds. D. currency, checking and savings deposits, and small time deposits.
Certain goods are related such that an increase in the price of one good decreases the quantity demanded of the other. These goods are
A. complements. B. substitutes. C. luxury goods. D. competing goods.
Productive efficiency occurs in perfect competition because the firm produces at the minimum of the: a. average fixed cost curve
b. average variable cost curve c. average total cost curve d. marginal revenue curve.
The courts in some states have declared the financing of public schools by local property taxes unconstitutional because
a. housing should never be the basis for taxation of any kind. b. taxes on real estate generate too much tax revenue. c. disparity in property values means some communities have more in tax revenues to spend on education than do communities containing less valuable property. d. the funds for public education should come from federal revenues, not from local property taxes.