Explain why government, rather than private firms, is required for efficient mosquito eradication programs
Mosquito eradication is a public good. It is nondepletable, so benefits to one do not reduce benefits available to others. It is also nonexcludable, so it would be difficult to prevent free riders. For both these reasons there is no opportunity cost to protecting an additional user. There is also the inability to keep out nonpayers even if it were efficient to charge (which it isn't). The government must provide the good if there is to be efficient protection.
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For a good such as a large screen HD television set, the income elasticity would likely be
A) negative. B) equal to zero. C) positive and less than one. D) positive and greater than one. E) undefined because large screen, HD TVs are bought by many consumers.
Two candidates are running for election as mayors of New York City that was recently impacted by Superstorm Sandy. In their election platforms, both candidates supported spending very similar amounts on hurricane protection
This similarity is most likely the result of A) both candidates necessarily having the same preferences towards risk and protection. B) the Principle of Minimum Differentiation. C) both the candidates realize that hurricane protection is a public good. D) politicians only take efficiency into account and hence all candidates will suggest the efficient outcome.
From 1981 till 1995, the ratio of revenue to GDP was around
A) 19.8%. B) 21.5%. C) 18%. D) 3.5%.
Price ceilings are primarily targeted to help __________, while price floors generally benefit __________
a. producers; no one b. increase tax revenue for governments; producers c. increase tax revenue for governments; consumers d. producers; consumers e. consumers; producers