Assume that Abby, Ben, and Clara are the only citizens in a community. A proposed public good has a total cost of $1000. All three citizens will share an equal portion of this cost in taxes. The benefit of the public good is $400 each to Abby, Ben, and Clara. Based on economic analysis, the public good should:
A. Be produced, because the benefits are greater than the costs
B. Not be produced, because the costs are greater than the benefits
C. Be put to a vote, and produced only if voters approve it
D. Not be produced, even if voters vote in favor of it
A. Be produced, because the benefits are greater than the costs
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Deliberately cutting taxes or increasing expenditures to fight an economic downturn is called ________
Fill in the blank(s) with correct word
Refer to Figure 2-13. What is the opportunity cost of producing 1 ton of coconuts in Guatemala?
A) 1/2 of a ton of pineapples B) 1 1/3 tons of pineapples C) 2 tons of pineapples D) 90 tons of pineapples
As of 2012, mortgage-backed securities made up approximately what portion of securities held by a bank?
A) 5% B) 20% C) 50% D) 70%
An absolute price elasticity of demand equal to 2 indicates that a
A. 1 percent increase in price leads to a 2 percent decrease in quantity demanded. B. 10 percent decrease in price leads to a 2 percent increase in quantity demanded. C. 2 percent increase in price leads to a 10 percent decrease in quantity demanded. D. 0.2 percent decrease in price leads to a 1 percent increase in quantity demanded.