The market produces too few public goods because:
A.) The link between payment and consumption is broken.
B.) They must be paid for by wealthy individuals.
C.) Only the government can produce public goods.
D.) The market distributes goods to those with the most money.
A.) The link between payment and consumption is broken.
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Explain the difference between a normal good and an inferior good
What will be an ideal response?
We measure a person's productive contribution in a market system by
A) the marginal factor cost theory of the firm. B) the profit maximization theory of the firm. C) the marginal revenue product theory of wage determination. D) the egalitarian theory of wage determination.
Other things constant, the price elasticity of demand for a product will be smaller (more inelastic) if:
a. people spend a large share of their income on the product. b. people spend an insignificant share of their income on the product. c. the population in the market area is large. d. there are many good substitutes for the product.
If an economy has to sacrifice increasing amounts of good X for each additional unit of good Y produced, then its production possibility frontier is:
A. bowed out from the origin. B. bowed in toward the origin. C. a straight line. D. a vertical line.