Which of the following is the best example of a product or service that provides a benefit externality?
A) the construction of a private road that allows vehicles if a toll is paid
B) a public library
C) a bookstore that is open to everyone
D) All of the above
E) None of the above
B
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If the price of food falls by 10 percent and the quantity sold increases by 5 percent, then the price elasticity of demand in that range equals
a. 2, and demand is elastic b. 0.5, and demand is elastic c. 2, and demand is inelastic d. 0.5, and demand is inelastic e. 15, and demand is elastic
In the economic world of production, there are either price makers or price takers. By price takers we mean that
a. firms buy goods as well as sell them, and when they buy goods at whatever price, they play the role of "takers" b. firms take control of their own markets, charging whatever price they think the market will bear c. firms take the market price as given d. firms create the price and consumers either take it or leave it e. the market takes whatever price the firms charge, which is how the downward-sloping demand curve is created
Everything else equal, the more rivals a firm has, the
A. less kinked is its demand curve. B. closer is its equilibrium price to its average variable costs. C. more differentiated is its product from rivals’ products. D. more elastic is its demand curve.
The European Central Bank's Marginal Lending Facility is used to provide:
A. short-term loans at rates above the target refinancing rate. B. long-term loans to banks at rates below the target refinancing rate. C. long-term loans to banks at rates above the target refinancing rate. D. short-term loans to banks at rates below the target refinancing rate.