Explain why broadcasting television over the air is considered a public good. Why is cable TV not a public good?
Broadcast television is a good that is nonrivalrous (I can watch at the same time as others) and nonexclusive (benefits cannot be restricted to those who pay) in nature. However, cable TV can exclude nonpayers, so that it is not a public good.
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Suppose Kate's Great Crete (KGC) has annual variable costs of VC = 30Q + 0.0025Q2 and marginal costs of MC = 30 + 0.005Q, where Q is the number of cubic yards of concrete it produces per year. In addition, it has an avoidable fixed cost of $50,000 per year. KGC's demand function is Qd = 20,000 - 400P. What is KGC's average cost function?
A. AC = (50,000/Q) + 50 + 0.005Q B. AC = (20,000/Q) + 30 + 0.005Q C. AC = (50,000/Q) + 30 + 0.0025Q D. AC = 50,000 + 30Q + 0.0025Q2
If a monopolist wants to increase the amount it sells, it
A) will keep the price the same. B) must lower the price on all units. C) must accept lower profits. D) must lower the cost of production.
To efficiently improve environmental quality, it is usually
A) better to focus on the hardest areas to clean up first since these usually are the biggest problems. B) more appropriate to concentrate on the physical quantities of pollution rather than on economic costs. C) best to set up stringent emission standards that must be followed by everyone. D) better to focus on economic damages rather than physical quantities of pollution.