The classic example of a public good is a lighthouse. Explain why lighthouses were provided by government
Lighthouses are nonexclusive and nonrival. Therefore, they are public goods which will not be provided by
the marketplace. Since they were important navigational devices, this underprovision was significant
enough to warrant government provision.
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Reserves are a bank ________ consisting of ________
A) asset; vault cash plus bank deposits with the Federal Reserve B) asset; checking account deposits and savings account balances C) liability; vault cash plus bank deposits with the Federal Reserve D) liability; checking account deposits and savings account balances
If 80 percent of the population receives 75 percent of the income,
a. the richest quintile receives 20 percent of the income. b. the Lorenz curve is the diagonal. c. income is not perfectly evenly distributed. d. the poorest quintile receives more than 20 percent of income. e. people in the middle quintile have the highest incomes.
Which of the following is the primary cause of inflation?
a. an increase in the quantity of money b. an increase in government spending c. an increase in unemployment d. an increase in productivity
A firm has a fixed cost of $500 in its first year of operation. When the firm produces 100 units of output, its total costs are $4,500 . The marginal cost of producing the 101st unit of output is $300 . What is the total cost of producing 101 units?
a. $46.53 b. $800 c. $4,800 d. $5,300