Which of the following about public goods is true?
a. Consumption of a public good by one individual reduces the availability of the good for others.
b. It is extremely difficult to limit the benefits of a public good to only the people who pay for it.
c. Public goods are free to a society when they are produced by the government.
d. From an efficiency standpoint, a market will generally supply too much of a public good.
B
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If the amount you owe on your house is greater than the price of the house, you have
A) negative equity in your house. B) no value to your house. C) a reverse mortgage on your house. D) a mortgage rate that is too high.
Since classical economists and monetarists believe that the economy operates at full employment, real GDP, that is, along the vertical segment of aggregate supply:
a. any increase in the money supply can only end up raising the price level. b. any increase in the money supply can only end up lowering the price level. c. any decrease in the money supply can only end up raising the price level. d. changes in the money supply will not affect the price level. e. any increase in the money supply will cause both nominal and real GDP to increase.
In the absence of a subsidy, production efficiency by a natural monopolist will
A. Be achieved if price is set equal to marginal cost. B. Be achieved if marginal revenue is set equal to marginal cost. C. Never be achieved. D. Be achieved if price is set equal to average total cost.
Tom is buying a quantity of wheat at which the marginal utility (in dollars) exceeds price. He should
A. reduce wheat consumption, thus raising P to the level at which MU = P. B. reduce wheat consumption, thus raising MU to the level at which MU = P. C. increase wheat consumption, thus raising P to the level at which MU = P. D. increase wheat consumption, thus lowering MU to the level at which MU = P.