A . What is the difference between a pure public good and a near-public good? b. Are streets pure public goods or near-public goods?
a . The use of a pure public good does not reduce others' use of it. The use of a near-public good does,
after some point, reduce the amount or quality of it available for use by others. Also, people cannot
be excluded from consuming a pure public good, but they can be excluded from consuming a near-
public good.
b. Streets are near-public goods, to the extent that it is possible to convert them to toll roads where non-
payers are excluded from using them. Also, as more and more people use a given street, it becomes
congested, reducing others' use of it.
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From the economic point of view, "joint costs" are problematic because
A) they can only be determined in markets for illicit drugs. B) there is no way to correctly allocate joint costs. C) they can be measured only by the most sophisticated accounting techniques. D) there is no way to discuss the concept meaningfully.
Classical economists believed that
A) real GDP per person would rise above its subsistence level in the long run. B) real GDP per person would never rise above its subsistence level in the long run. C) the demand for labor increases when the population increases. D) population growth decreases as real GDP per person rises.
Suppose that last year you borrowed $100 at 5 percent interest to purchase a $100 pair of Nike cross-training shoes. This year you repaid the bank with interest. If the inflation rate was 10 percent last year (so the price of shoes rose to $110), your purchase of the shoes would
a. make you an inflation winner because you gained $5 by borrowing rather than waiting the year to buy the shoes b. make you an inflation loser because you paid $5 more than you should have for the shoes c. not be affected at all by the inflation rate because the shoes were already purchased d. be valued at $100 e. be valued at $110 multiplied by the inflation rate
If countries do not engage in international trade:
A) they give up the ability to specialize in production. B) worldwide levels of production are lower. C) the world will be operating inside its production possibilities curve. D) all of the above are true.