Starting from long-run equilibrium, an increase in autonomous consumption results in ________ output in the short run and ________ output in the long run.
A. higher; higher
B. higher; potential
C. lower; higher
D. lower; potential
Answer: B
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It is argued that the market will
A. not produce a nonexcludable public good. B. produce the socially optimal output of a nonexcludable public good. C. produce too much of a nonexcludable public good. D. produce a nonexcludable public good if marginal social benefits are equal to marginal private benefits. E. b and d
If the demand for a good falls by less than the supply of the good rises, then the good's equilibrium price will __________ and its equilibrium quantity will __________
A) rise; fall B) rise; rise C) fall; fall D) fall; rise
What happened to government expenditures during World War II?
a. They increased. b. They decreased. c. They were suspended. d. They were capped.
Refer to the diagrams in which figures (a) and (b) show demand curves reflecting the prices Alvin and Elmer are willing to pay for a public good, rather than do without it. The collective willingness to pay for the first unit of this public good is:
A. $18.
B. $14.
C. $10.
D. $6.