Stadiums and arenas built for use by professional sports teams are often paid for by local governments using tax dollars
What kind of goods are these stadiums and arenas, and why would government use tax dollars to pay for them when the professional sports franchises that use them are generally quite successful, financially?
Sports stadiums and arenas are examples of club goods, since they are nonrival but excludable. Governments would most likely agree to pay for these stadiums with tax dollars as opposed to having the teams fund them themselves because the local governments generally believe that the overall benefit of having the team and the new stadium outweighs the cost to the taxpayers who fund the building of the stadiums, and therefore increase the overall size of the economic pie.
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The government of Lithasia ran a budget deficit of $60,000 in 2014. If the tax revenue of the Lithasian government in 2014 was $320,000,000, how much did the government spend in that year?
A) $319,940,000 B) $1,060,000 C) $320,060,000 D) $49,000,000
The stricter the enforcement of a price ceiling, the
A) smaller is the difference between the black market price and the legal market price of the good. B) larger is the difference between the black market price and the legal market price of the good. C) greater is the amount of the good available in total, from either the legal market or the black market. D) Both answers B and C are correct.
Suppose the rural wage is $1 per day. Urban modern sector employment can be obtained with 5 probability and pays $2 per day
Will there be any rural-urban migration? Explain your reasoning, stating explicitly any simplifying assumptions, and show all work.
In order to obtain an efficient allocation of resources worldwide
A) countries that have a lot of resources should ship resources to countries that do not have a lot of resources. B) countries that have a lot of resources should not trade since poorer countries cannot compete. C) each country should produce the good they have a comparative advantage in and then trade. D) no trade among countries should occur.