Why is it safe to assume that national defense will always be provided by the government instead of the market?
What will be an ideal response?
National defense is a public good, which means that consumption by one person does not exclude consumption by other people. This joint consumption creates a dilemma referred to as the free-rider problem. Once national defense is purchased, even those who do not pay for the defense will benefit from it, so no one person is willing to pay for the defense. The government must get involved and provide national defense and other public goods.
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The above figure shows the competitive market for turkey. The consumer surplus for the 300 millionth pound of turkey is
A) $2.00 per pound. B) $225 million. C) $0.80 per pound. D) $0.50 per pound.
In a Mexican factory, each worker can produce 1/8 of a vase or 1/16 of a statue per hour. If there are 400 workers at the factory, the opportunity cost of one statue is
a. 1/2 of a vase b. 1/8 of a vase c. 8 vases d. 16 vases e. 2 vases
The production function has ____ on the horizontal axis.
A. real GDP B. capital stock C. technology D. labor input
John is maximizing utility by choosing to spend 90 minutes reading a chapter in The Theory of Moral Sentiments, which will give him 450 units of utility, instead of spending 20 minutes reading a chapter of Atlas Shrugged, which will give him 200 units of utility. (Assume marginal utility decreases slowly.)
Answer the following statement true (T) or false (F)