The primary difference between private goods and public goods is that
A. private goods are consumed by private individuals whereas public goods are not consumed by private individuals.
B. private goods often yield externalities but public goods do not.
C. property rights can be assigned to public goods but not to private goods.
D. public goods are nonrivalrous in consumption whereas private goods are rivalrous in consumption.
Answer: D
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The economic theory of government predicts elected officials at the federal level will have incentives to act in ways that
A) cause inflation. B) increase uncertainty and the instability of total demand. C) secure short-term economic gains with deferred costs. D) result in all of the above. E) result in none of the above because they will usually want to be reelected.
Suppose that the number of jobs in the fishing industry decreases but the number of jobs in the travel industry increases. Initially, ________
A) the economy remains at full employment B) structural unemployment increases C) there is a shortage of workers in both sectors D) cyclical unemployment increases
A major point of the Baumol-Tobin model of the transactions demand for money is that they show that the
A) demand for money is related to income. B) velocity of money is constant. C) fraction of income that people wish to hold in the form of money is constant. D) interest sensitivity of the demand for money is based on a transactions motive shared by most people.
An example of a final good in national income accounts would be a new:
A. microcomputer purchased by an executive for business use. B. automobile purchased by a travel agency. C. microcomputer purchased by an executive for personal use. D. tractor purchased by a construction company.