The market demand curve for a public good is found by
A. horizontally summing the individual demand curves.
B. vertically summing the firm's demand curves.
C. horizontally summing the firm's demand curves.
D. vertically summing the individual demand curves.
Answer: D
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Bongo plays drums in his parents' garage after school. What can we be sure of?
A) Bongo's drumming imposes negative externalities on others. B) Bongo's drumming delivers positive externalities to others. C) Bongo expects to benefit while drumming. D) All of the above.
In the graph of supply and demand in the market for labor:
A. individuals make up the demand curve. B. the equilibrium price of labor is generally denoted as L*. C. firms provide the demand. D. equilibrium is rarely achieved.
All of the following would increase the natural rate of unemployment EXCEPT
A) union activity restricts the mobility of labor. B) government licensing of teachers restricts employment. C) a mismatch of skills and jobs. D) a downturn in the economy.
The difference between moral hazard and adverse selection is that moral hazard is about:
A. actions that arise after the parties enter an agreement B. unobserved characteristics of people occurring before parties enter into an agreement. C. never happens when adverse selection is a problem. D. None of these statements is true.