Elsa is annoyed that it costs her 25 cents to park her car at the city park, which is free to enter. Her friend says _______________, which demonstrates how the government provides public goods.
a. “The city council is lining their own pockets with those quarters.”
b. “Those parking fees help keep the park maintained and open for everybody.”
c. “The park is free because it doesn’t need any maintenance, but the parking spaces do.”
d. “So don’t pay it. What difference does it make?”
b. “Those parking fees help keep the park maintained and open for everybody.”
Some public goods will also have a mixture of public provision at no charge along with fees for some purposes, like a public city park that is free to use, but the government charges a fee for parking your car, for reserving certain picnic grounds, and for food sold at a refreshment stand.
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Because Product X has a very small, positive income elasticity of demand, it is likely that product X is a
A) luxury. B) necessity. C) product with many good substitutes. D) product with many good complements.
In drilling a new oil well in an existing oil field, the fact that output on existing wells is reduced means that
a. existing wells have negatively sloped marginal cost curves. b. existing wells and new wells are owned by different people. c. existing wells and new wells are owned by the same people. d. there is a discrepancy between private and social marginal costs.
Refer to the diagram. If the full-employment level of GDP is B and aggregate expenditures are at AE 2 , the:
A. inflationary expenditure gap is ed.
B. recessionary expenditure gap is BC.
C. inflationary expenditure gap is eg.
D. economy is in equilibrium, at full employment.
Another label for the market for loaned funds is the:
A) spot market. B) credit market. C) capital market. D) exchange market.