Answer the following statement(s) true (T) or false (F)
1. Each user of a common property imposes a negative externality on its other users.
2. The producer of a public good creates a positive externality, so that such goods tend to be overproduced.
3. The tragedy of the commons is a situation where too much of an input is used by individuals, collectively making each individual worse off.
4. When people have identical tastes, an increase in the demand for a common property's use will increase the social gain it creates.
5. People use a common property up to the point where the marginal cost of using it equals the social marginal benefit received from it.
1. True
2. False
3. True
4. False
5. False
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The figure above shows the costs for a grower in the perfectly competitive turnip market. If the price is $1,200 for a ton of turnips, the firm is
A) making an economic profit. B) making zero economic profit. C) incurring an economic loss. D) More information is needed to determine if the firm is making a positive economic profit, zero economic profit, or incurring an economic loss.
Because a price ceiling causes:
A. a shortage, some form of rationing must occur. B. a surplus, some form of rationing must occur. C. a shortage, the outcome will be efficient. D. a surplus, the outcome will be inefficient.
The relationship between income and education is clear. At every age, those with more education earn more
a. True b. False
Supply and demand provides the basic explanatory framework for constructing both microeconomic and macroeconomic models
a. True b. False Indicate whether the statement is true or false