A student makes the following statement: "The real problem with pure public goods is that they are nonrival and nonexcludable." Explain whether you agree or disagree with the student's statement
What will be an ideal response?
You should disagree with the statement. Although pure public goods are, indeed, both nonrival and nonexcludable, the public goods problem stems from the fact that pure public goods are nonexcludable, and therefore subject to free riders. The nonrival aspect of pure public goods does not contribute to the public goods problem.
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Which of the following is the treaty that took the participating countries from a free trade area to a common market?
A) The Treaty of Rome B) The Maastricht Treaty C) Single European Act D) Treaty on European Union
Which of the following could create a cost advantage for a monopoly?
A) better technology B) lower friction due to better organization C) standardization D) All of the above.
Assume that we have a demand curve of the form: log(Q) = a - b log(P) + c log(I) where Q = quantity, P = price, I = income, and a, b, and c are positive constants
The income and price elasticities for the demand curve represented above are always A) equal to one. B) equal to zero. C) equal (i.e., income elasticity always equals price elasticity). D) constant but not necessarily equal to one another.
An example of a flow variable is
a. the number of cars in the United States today b. the current value of your wealth c. the population of Mexico d. income e. the number of sweaters a clothing store has on its shelves