An example of a good that is both rival and excludable is
A) the defense services provided by a new stealth bomber.
B) a pair of pants.
C) a beautiful sunset.
D) an uncrowded theme park such as Walt Disney World.
B
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In the long run, a perfectly competitive firm
A) can make either an economic profit or a normal profit. B) incurs an economic loss. C) makes zero economic profit. D) can make an economic profit, zero economic profit, or incur an economic loss. E) makes an economic profit.
If the interest rate were to fall, we expect that
A) the supply of money will fall. B) the supply of money will rise. C) autonomous expenditures will rise. D) the demand for money will fall.
If all consumers are uninformed about the quality of a product
A) firms can increase product by selling the same product under a different name at a different price. B) firms will not be able to price discriminate. C) firms will price discriminate. D) firms will increase profits by charging different prices for the same product.
Agency problems appear in many settings within a firm. All of the following are examples, except which is NOT a good example of this problem?
a. Diversified stockholders are more enthusiastic on accepting business risks than are firm managers. b. Firm managers receive cash bonuses based on the performance of the firm. c. Employees sometime take items from the store in which they work. d. Lenders to firms want the managers to invest in safe projects to protect their collateral in the project but managers want to invest in projects that will make a name for them and warrant promotion. e. Firm managers sometime want to relax on the job.