The table below shows the marginal benefit and marginal cost of purchasing an additional unit of 3 different public goods. Marginal benefitMarginal costTotal spending on the public goodPublic good 1$20$20$1,500Public good 2$15$25$800Public good 3$10$5$700 The government is spending more than is socially optimal on:
A. public good 1.
B. public good 1 and public good 2.
C. public good 3.
D. public good 2.
Answer: D
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Suppose a monopolist sells in two distinct markets. The demand and marginal revenue for the first market are given by P1 = 240 - 2Q1 and MR1 = 240 - 4Q1, respectively, where Q1 is the quantity demanded and P1 is the price paid by the first group. The demand and marginal revenue for the second market are given by P2 = 120 - Q2 and MR2 = 120 - 2Q2, respectively, where Q2 is the quantity demanded and P2 is the price paid by the second group. The monopoly's marginal cost is given by MC = 4/9 Q, where Q is the total output produced by the monopoly.
(i) How much does the monopoly supply in each market and what price does it charge? (ii) What is the common equilibrium value of marginal revenue and marginal cost? (iii) Use your answers to parts i and ii to calculate the elasticity of demand for each market.
Differences in growth rates cannot explain why
A. some countries are wealthier than others. B. income inequality exists. C. the convergence hypothesis may hold. D. the productivity growth rates in China and Japan are converging.
A decrease in the expected future exchange rate ________ the demand for U.S. dollars and shifts the demand curve for U.S. dollars ________
A) increases; rightward B) decreases; rightward C) decreases; leftward D) increases; leftward
In a zero-sum game
A) the gains of one player are less than the gains of the other player. B) the gains of one player are greater than the gains of the other player. C) the gains of one player directly reflect the losses of another player. D) the gains and losses of players are all expressed in zeros.