Which of the following is a necessary characteristic of a public good? The good is
A) excludable.
B) nonrival.
C) nonexcludable.
D) Both answers B and C are correct.
D
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Assume an economy produces only hamburgers and hotdogs and the base year is 2005. Quantity producedPrices 2005200620052006Hamburgers2,0003,0002$3Hotdogs3,0004,0001$1.50Given the data in the table above, what is the value of nominal GDP in 2006?
A. $15,000 B. $10,500 C. $ 5,000 D. $ 7,000
Which of the following is an example of a normative economic statement?
A) Prices rise when the government prints too much money. B) Universal access to quality health insurance is the most important domestic policy issue of our time. C) Interest rates rise when the government runs persistent budget deficits. D) Extending the time in which laid-off workers are eligible to receive government unemployment compensation has increased the unemployment rate. E) Lowering marginal income tax rates depresses consumer spending.
The free rider problem occurs because:
a. it is easy to exclude others from consuming a good. b. consumption is rivalrous, so the consumption of a product by one individual diminishes the amount available for others. c. exclusion is costly or impossible, so a consumer or producer can use a good without having to pay for it. d. external costs are imposed on others not directly involved in the transaction. e. individuals are not required to pay for those goods which do not yield any utility to them.
Which of the following observations would be valid if the Gini coefficient is equal to zero?
a. Perfect income inequality b. Greater degree of income inequality c. Lorenz curve overlaps the line of perfect income equality d. Unequal distribution of income