Suppose that your local government provides drinking water and charges a 10 cent per gallon fee. Explain whether or not the drinking water is a public good.
What will be an ideal response?
A good is defined as a public good when the consumption of the good is both nonrival and nonexcludable. Even if drinking water is provided by a local government, it is a publicly provided private good not only because it is rival in consumption but also because it is excludable (the supply of drinking water will be cut off if you do not pay).
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The primary source of funds for the World Bank is
A) the world's wealthiest countries. B) the New York Stock Exchange. C) private financial markets. D) quota subscriptions.
Rachel babysits for her sister for no pay. When she babysits for someone else she charges $8 an hour. When is Rachel's babysitting included in GDP?
a. When she babysits for her sister and when she babysits for someone else. b. When she babysits for her sister, but not when she babysits for someone else. c. When she babysits for someone else, but not when she babysits for her sister. d. Neither when she babysits for her sister nor for someone else.
Which of the following is used to determine the terms of trade?
A. Absolute costs. B. Opportunity costs. C. Export ratio. D. Per capita GDP.
Most business cycle theories are
A. endogenous. B. exogenous. C. both endogenous and exogenous. D. neither exogenous nor endogenous.