The rule of thumb for a government deciding whether to provide a public good is that the:
a. marginal cost of the good should be less than the marginal benefit
b. opportunity cost of the good should be greater than the marginal benefit.
c. sunk cost of the good should be equal to the marginal benefit.
d. variable cost of the good should be greater than the sunk cost.
a
You might also like to view...
The figure above shows the market for coffee. The ________ price that producers must be offered to get them to produce 30 million pounds of coffee per month is ________
A) maximum; $2.50 B) minimum; $2.50 C) maximum; $4.00 D) minimum; $4.00
Less-developed countries are poor for all of the following reasons except one. Which one?
a. They do not produce many goods and services. b. Labor productivity is low. c. Investment funds tend to flow abroad d. Investment in human capital is very low. e. The labor force is too small.
If national income = $1,000 . autonomous consumption = $200, the MPC = 0.80, and intended investment demand is $200, then actual investment will
a. equal intended investment, and the economy will be in equilibrium b. be less than intended investment, and production and incomes will grow c. be greater than intended investment, and production and incomes will fall d. be less than intended investment, and production and incomes will fall e. be greater than intended investment, and production and incomes will grow
The aggregate supply-aggregate demand diagram models
A. the behavior of individual firms. B. the interaction of producers and consumers for a particular good or service. C. the economy as a whole. D. the behavior of individual consumers.