Which statement is true?
A. A pure private good can never be jointly consumed.
B. The price theory we studied always considers efficient output to be the place where marginal cost equals marginal benefit, even if the good is a pure public good.
C. For efficiency to be achieved in the production of a public good everyone should be taxed an amount equal to the value they place on the last unit of the good provided times the quantity of public good provided.
D. All of these are true.
Answer: D
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Economists believe the most persuasive argument for protectionism is to protect infant industries. But the argument has a drawback. What is this drawback?
A) Governments are usually too impatient and do not allow protection to remain in place long enough to allow industries to be competitive in international markets. B) Protection lessens the need for firms to become productive enough to compete with foreign firms; this often results in infant industries never "growing up." C) Governments usually use tariffs, rather than quotas, to protect infant industries in order to collect tariff revenue. (Quotas do not result in government revenue). D) Governments always make the level of protection for infant industries too high.
Which of the following is most likely a topic of discussion in macroeconomics?
a. an increase in the price of a pizza b. a decrease in the production of DVD players by a consumer electronics company c. an increase in the wage rate paid to automobile workers d. a decrease in the unemployment rate
The money multiplier works best if all transactions in the economy are made through the banking system
a. True b. False Indicate whether the statement is true or false
A recessionary gap:
A. is of little consequence in a capitalist economy. B. represents actual physical output lost. C. implies an equilibrium level of output less than the full-employment level. D. will automatically close, according to the Keynesian model.