Suppose that a state installs a toll booth on a highway and requires drivers to pay $1.00 before entering the highway. Installation of the toll booth changes:
A. a nonexcludable good into an excludable good.
B. a nonrival good into a rival good.
C. public good into a private good.
D. a nonrival good into a nonexcludable good.
Answer: A
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Assuming all else equal, if the labor demand curve shifts to the left and the labor supply curve remains unchanged, ________
A) equilibrium wage falls B) consumption falls C) unemployment rises D) equilibrium wage rises
The typical total profit graphical presentation is shown as
A. a square. B. a rectangle. C. a hill, or mound. D. an S curve.
If tax reduction and simplification are effective, then
A) real wages will rise as labor supply and demand increase. B) economic efficiency will increase. C) interest rates will rise in financial markets and demand for financial assets falls. D) fewer new firms will be established, since existing firms will make more profit.
What does it mean to say that workers and firms have rational expectations?
What will be an ideal response?