The privately-owned school system in Smalltown has a virtually unlimited capacity. It accepts all applicants and operates on both tuition and private donations. Although every resident places value on having an educated community, the school's revenues have suffered lately due to a large decline in private donations from the elderly population. Since the benefit that each citizen receives from
having an educated community is a public good, which of the following would not be correct?
a. The free-rider problem causes the private market to undersupply education to the community.
b. The government can potentially help the market reach a socially optimal level of education.
c. A tax increase to pay for education could potentially make the community better off.
d. The private market is the best way to supply education.
d
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If the national incomes of our trading partners increase, then our aggregate demand ________.
A. decreases because consumption decreases B. increases because net exports increase C. decreases because net exports decrease D. increases because consumption increases
Offering different opportunities to similar individuals who differ only by race, ethnic group, sex, age, or other personal characteristics is called
a. a compensating differential. b. an efficiency wage. c. discrimination. d. compensating variation.
Innovation tends to be an extremely competitive activity that allows few opportunities for firms to share information with one another.
Answer the following statement true (T) or false (F)
Refer to the above table. At a wage rate of $23 per worker, the firm will choose to employ:
A. 2 workers
B. 3 workers
C. 4 workers
D. 5 workers