In a voluntary contributions experiment described at the end of the chapter, the chump is the individual who:
A. is systematically exploited by others.
B. contributes money to fund a public good equal to the benefits they ultimately receive.
C. free-rides.
D. contributes money to fund a public good much less than the benefits they ultimately receive.
Answer: A
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Marginal utility diminishes as consumption of a good decreases
Indicate whether the statement is true or false
An increase in the level of total factor productivity will lead to
A) an increase in the capital-labor ratio and an increase in real GDP worker. B) an increase in investment and a decrease in depreciation. C) an upward shift of the break-even investment line and an increase in the capital-labor ratio. D) a higher rate of dilution and lower break-even investment.
Kate receives two free passes to the waterpark for her birthday. She's not a huge fan of waterparks, and, therefore, would not buy such tickets for their face value of $90. Kate decides to use the tickets. This type of behavior is explained with the concept of:
A. the implicit cost of ownership. B. the fungibility of money. C. ignoring sunk costs. D. None of these.
Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher