How do public goods differ from private goods?
What will be an ideal response?
A private good is characterized by the principle of rival consumption, which means that one person's consumption of a good reduces the amount available for someone else. A public good is not characterized by the principle of rival consumption. Public goods can be used by more people at no additional cost. Further, once the good is produced, it is usually impossible, or at the very least difficult, to exclude anyone from consuming it.
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In the one-period competitive model we have been studying
A) both consumption and total factor productivity are exogenous. B) consumption is exogenous and total factor productivity is endogenous. C) consumption is endogenous and total factor productivity is exogenous. D) both consumption and total factor productivity are endogenous.
Double taxation is a problem for corporations
a. True b. False Indicate whether the statement is true or false
If aggregate demand shifts because of a wave of pessimism about stock prices, those who favor a policy that "leans against the wind" would advocate the
a. Federal Reserve increase the money supply or the government increase taxes. b. Federal Reserve increase the money supply or the government decrease taxes. c. Federal Reserve decrease the money supply or the government increase taxes. d. Federal Reserve decrease the money supply or the government decrease taxes.
The amount by which consumption increases when after-tax income increases by $1 is called the:
A. marginal propensity to consume. B. consumption multiplier effect. C. marginal consumption revenue. D. variable propensity to consume.