A highway is a public good _____
a. if it is free
b. if it is publicly run
c. if it is uncongested
d. if drivers cannot be excluded from driving on it
c
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Suppose that your public library charges a fixed monthly membership fee of $12. Members are allowed to check out as many books as they want under this plan. The average member checks out 4 books per month
Suppose that your public library changes its policy. Now each book costs $3 to check out but there is no longer a monthly membership fee. What effect do you think the new policy will have on the total number of books checked out from your library each month? The new policy is likely to ______the number of booked checked out because ________. A) reduce; the marginal benefit of checking out books is now lower under the new policy B) increase; the average benefit of checking out more than 4 books is now higher under the new policy C) reduce; the marginal cost of checking out books is now higher under the new policy D) leave unchanged; members have already shown that they are willing to pay $12 to check out 4 books per month E) leave unchanged; the average cost of the library service is the same under both plans
A subsidy is sometimes used by the government to correct the problems associated with
A) negative externalities. B) positive externalities. C) public goods. D) monopolies.
If a model fits reality but doesn't generate testable predictions, it is of little value to economists
Indicate whether the statement is true or false
A competitive firm's shutdown price is equal to the minimum value of the firm's
a. marginal cost. b. average cost. c. average variable cost. d. fixed and sunk costs.